Final Regulatory Impact Analysis and
Summary and Analysis of Comments on the NPRM
   Interim Control of Gasoline Volatility
              January 19, 1989
    U.S. Environmental Protection Agency
         Office of  Air and Radiation
          Office of Mobile Sources

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                       Table of Contents
                                                           Page
     Introduction
1.    Period and Location of RVP Control                    1-1
2.    Effect of RVP on Vehicle Emission Factors             2-1
3.    Environmental Impact                                  3-1
4.    Economic Impact on Refineries                         4-1
5.    Cost Effectiveness                                    5-1
Appendix
     Summary and Analysis of Enforcement Comments

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     This Final  Regulatory  Impact  Analysis (FRIA)  comprises  a
significant  portion  of   the supporting  documentation  for  an
interim  national   RVP   control   program,   reducing   gasoline
volatility to 10.5,  9.5,  and 9.0  psi, depending on  the  area of
the country.  Documentation not included in this  Final  RIA may
be found in  the  Draft RIA  associated  with  the August  19,  1987
volatility proposal  or  in  the Preamble  to the Final  Rule for
the interim RVP control program.

     Included  in  the analyses found  here  are  summaries  of
comments received  on the issues pertaining  to the choice of the
period and location of RVP  control,  the  cost,  the environmental
impact and the cost  effectiveness  of an interim control program
cind EPA's  responses to  them.   Also included  is  a  summary and
analysis of  comments  received  on  how to  treat  alcohol blends
under  such  a program.   An  -appendix  to  this  document  contains
the summary  and  analysis of comments on the enforcement aspects
of this program.   The Preamble  addresses  comments  on the impact
of gasoline  volatility  regulations  on the natural  gas liquids
industry, the alcohol blend  industry and small refiners.

     Each  chapter  of  this  Final  RIA  begins  with  a  brief
synopsis of  the  methodology and  significant  input  factors of
the Draft  RIA analysis.   This  is  followed  by  a  summary and
s.nalysis of  the  comments received.   Completing  each chapter is
the final analysis of that aspect of the regulatory  analysis.

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                           Chapter  1

      Volatility Control Period  and Gasoline Distribution

I.    Synopsis of NPRM Analysis

     EPA's  volatility  proposal  which   would  limit  gasoline
volatility  during  a  determined  regulatory  control  period  was
based on  various  analyses and  assumptions.   The length  of  the
control period  was decided  upon after  examining  the  seasonal
pattern of  ozone violations  and the transition  times necessary
to blend  down the high  RVP  gasoline to  compliance RVP levels.
Volatility  control levels  were  based on  the  ASTM  RVP  class in
each  state.   The  relative RVP control levels  for each  ASTM RVP
class were  based  on  emission  analyses  showing roughly  equal
emissions when  constant percentage reductions  were  applied to
the  ASTM   limits.    The   following  paragraphs   summarize  the
analyses performed and the conclusions made.

     A.     Control Period

     Ozone  violations in non-attainment  areas  follow a seasonal
trend,  with the  majority of  violations  occurring  during  the
summer  months.   This is  due  to  the  higher  temperatures  and
longer  hours of daylight,  both  of which  contribute  to  ozone
formation.   Because  of  this seasonal  trend,  hydrocarbon  (HC)
emission  control  measures  which  have  the flexibility  of  being
implemented  for   only  a  few   months   during   the  year  are
advantageous.   Volatility  control  is  one   such  HC  emission
control measure which can be implemented  for  only  a few months
during  the  year  as   needed.   In order  to  determine  the  best
period  to implement  this control, EPA in the  DRIA  examined  both
the trends  of ozone  violations  in  non-attainment areas and the
time  required by  the gasoline  distribution   system  to deliver
RVP-controlled fuel to service stations.

      1.     Seasonal Pattern of Ozone Violations

      The  analysis  which EPA  used  in the  proposal  to  determine
the  period  during which  nationwide ozone violations  occurred
focused on  the  "design value day"  of  the non-attainment  areas.
This  day  is defined to be the  day  on which occurred the  fourth
highest daily maximum one-hour  measured  ozone concentration  in
the   area   over  a   three-year  period  (or,  when   less  data  is
available,  the  third highest  from  a  two-year  period  or  the
second  highest  from a  single  year's  data).   The  analysis,
therefore,  focuses on a one-day  period  for  each non-attainment
area.    EPA's   analysis  in   the   DRIA  of  seasonal  ozone
non-attainment  examined the  distribution  of   design  value  days
over  the twelve  months in  order to determine  a period  during
which nearly all  of these days would occur.   The  analysis  used
1982-84   design   value   days    for    non-California   urban
non-attainment  areas.

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                               1-2
     EPA also  performed  a second, broader  analysis  in  the DRIA
which  examined  all  ozone  exceedance  days  rather  than  just
design   value   days.    This   analysis   focused  on   1981-83
exceedances rather than  1982-84.   The total  annual  exceedances
by month  for  the non-attainment  areas  were tabulated.   Because
exceedances  were  taken  from   each  monitoring  site   an;;,  a
non-attainment area may have  more than one monitoring site, any
specific   non-attainment   area   could   have  more   than   31
exceedances per  month  (one violation per  day)  depending on how
many monitoring sites the area had.

     Finally,   EPA  evaluated  seasonal  trends  in  peak  ozone
concentrations.  The average  of  all  areas' maximum ozone levels
by  month  were  used  to  determine  over   what   period  peak
concentrations occurred.

     Houston was  singled out as  a having  a  unique,  year-round
ozone problem  and  some of the analyses excluded  Houston due to
this  fact.   The  ozone  exceedance  data  for  Houston  showed  a
relatively large number of exceedances  in  1980  and 1983.  Also,
Houston  recorded  exceedances  in  every  month of  both years; no
other area  recorded exceedances  in  more  than  eight months of
either year.

     Based  on  the results of  the above  evaluations, EPA found
the  two  primary  choices for  seasonal  ozone  control  to  be
May-September  and  June-September.    Because  of  the  greater
potential   to   impact   ozone  exceedances,   May-September  was
recommended   as   the  period  when   ozone  control  should" be
regulated.

     2.    Transition Times for Compliance

     The proposed  volatility control program was aimed  at the
months  during  the year when  the majority  of ozone  exceedances
occur:  May through September.  EPA  recognized  the fact that in
order  to be  in  compliance  at  all  points in  the distribution
system,  fuel must  be refined and shipped  before  the compliance
date.   Based  on a  contractor  report  ("Petroleum  Storage and
Transport  Times,"   Jack  Faucett  Associates  (hereafter Faucett
Study))  and EPA  evaluation,  the Agency assumed that  there would
be  an average shipping  time  of  about  four weeks prior  to the
beginning of the control period and  four weeks at the end.

     3.    Starting and  Ending  Dates for the Regulatory Control
           Period

     May 16 through September 15  was proposed as the regulatory
control  period and was  intended to provide  control  during the
entire  May through  September period.   This took  into account
the  calculated transition times at the beginning and end of the
control  period.   It also  assumed that  for  the  estimated  four
week  transitions  at  the  beginning  and  end  of  the control

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period,  controlled fuel  would  increasingly  enter the  market,
resulting in  the equivalent  of • two weeks  of complete  control
during each four week transition period.

     B.    State-by-State Volatility Classifications

     In  the  Volatility DRIA, EPA proposed  to  adopt RVP control
levels which  represented  a  constant percent reduction  from the
current  ASTM  gasoline  volatility classification  system for each
state  or portion of a  state during the  May  through  September
period.   This was based  on  the  observation that  such a system
yielded  roughly  consistent  evaporative  emissions  in  the  61
non-attainment   areas.    From   the    viewpoint   of   gasoline
distribution, this was  also  the  most straightforward  system to
use  due  to  the  fact  that  participants  in the  distribution
system were already familiar with the classification system.

     C.    Relative RVP Standards  in  the  ASTM Class A,  B  and C
           Areas

     Proposed volatility  standards in the  NPRM  were  derived
using  Class  C  fuel   as  a  base.   Reductions  in  RVP  levels
proportional  to  the  Class  C reduction  were  then applied to
Class  A  and  B  areas  in  order to  obtain  equivalent degrees of
omission control  in  all  areas  of  the country.   Class  C areas
were  used  as  the basis  since  the  climate  implicit  in  the
Federal  Test  Procedure (FTP), used in  developing our  test data
on  the  effect  of RVP  on emissions,  most  closely  matches the
climate  in Class C areas.

II.  Summary  and Analysis of Comments

     EPA received  comments  on  each  of  the  topics summarized
above.   The  following  sections  will  summarize   the   comments
received in  these  areas  and  give  EPA's  response  to  these
comments.

     A.    Control Period

     Comments on  the  control period   were  divided into  three
main  topics:  1)  the  seasonal  pattern of  ozone violations; 2)
the length of time required to make the transition to  the  lower
RVP  fuel and problems that  may occur during this transition;
and  3)  the  starting  and ending  dates of  the  control period
itself.

      !•    Seasonal Pattern of Ozone Violations

     Although EPA proposed  a four-month  period for volatility
controls (mid-May to  mid-September)  which  when  combined  with
the  transition periods was  intended to give  sufficient control
for  the five  month  period  of May   through  September,   NRDC
pointed  out  that  ozone  violations are not  solely confined to

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the  summer  months.    They  commented  that  EPA data  show  that
nineteen  cities  experienced  at   least   one   ozone   violation
outside  the  May-September  period  in  1980.   Because of  this,
there should also be  concern about preventing  ozone  violations
in early spring and  "Indian summer."

     SOHIO stated  that  if  the  necessary  two-month  transition
periods were  added  to the  proposed regulatory control  period,
the  length  of  the   control   period   would  increase.    This,
however,  would have  a  minimal   impact   on. the  ambient  ozone
levels  since  the  emission reductions  would  occur  before  or
after the "ozone season."

     Whereas   the  DRIA  analyses  suggested that  ozone  control
during  May  through  September  was  most  important,  EPA  has
reanalyzed this issue  using  more recent ozone  data.    Ozone
exceedance data from  1985-87 was examined  to determine  more
precisely  when  ozone   exceedances occurred.    Analyses  were
performed  to  determine  the  percentage  of  exceedances  that
occurred  during the  proposed  period of  May through  September,
and  then  to  look  at  the percentage and  level  of  exceedances in
April  and October.    The   geographic  locations  of  April  and
October exceedances were then  examined to determine whether the
pattern  of  exceedances  was unduly influenced by any  unusual
local ozone problems.

     Table   1-1   shows  the  results   of  an  analysis  which
calculated the percentage  of  ozone exceedances which  occurred
during   various   monthly   periods.    Due  to  the   fact  that
California  and  Houston  both  have  serious  ozone  exceedance
problems  during  many months  of   the  year,  the  analysis  was
performed  both with  and  without  these  areas.   Their  unique
ozone  problems influence the  potential  control period and will
likely  warrant extra  local control strategies in both cases.
EPA  found that  for   the   entire  nation  88.5 percent   of  the
exceedances  fell  in  the  May  through  September   period.   This
increased  to  95  percent   when  California  and  Houston  were
excluded.

     EPA  then looked  at the  months   of   April  and  October  to
determine  how frequent  were  the  exceedances   in  those  months.
For  the  entire nation,  4  percent of  all exceedances  fell  in
each  of the  months of  April  and  October.  When  California and
Houston were excluded, 3 percent  of the  exceedances occurred in
April  and only one  percent  in October.  These  results show that
control during the period  of May  through September would affect
approximately  95 percent of  the nationwide exceedances.

     In   addition  to   looking   at   the  frequency   of   the
exceedances,    the  ozone   levels   associated  with  the   1985-87
exceedances  in May and  September as  well as  April and October
were examined.  At an  ozone concentration greater  than or equal

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                           Table l-l

      1985-87 Ozone Exceedances by Month  (Percent of Total)

                      Entire Nation     Without CA and Houston

April                       4                      3
May-September              88.5                   95
October                     4                      1

   Percent of Exceedances Greater than or Equal to .14 ppm 03

April                      45                     36
May                        38                     32

September                  44                     22
October                    69                     67

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to  0.14,   additional  control  over  the  stationary  and  mobile
source  control   which   is  currently  being  phased  in  may  be
necessary  to  bring an  area into  compliance.   Table  1-1  shows
the percentages  of  exceedances  greater  than or  equal to  0.14
for  each   of  the  four  months.    In April,  45  percent of  the
exceedances for  the entire nation were greater than  or  equal to
0.14.  When California  and Houston were  excluded,  this dropped
to  36  percent.    For   comparison,   in   May  38   percent   of
exceedances nationwide  were  greater  than  or  equal  to  0.14.
Excluding  California  and  Houston,  the  percentage  became  32
percent.   In  October  for the  entire nation,  69 percent  were
equal to or above  0.14.   This  only dropped  to 67 percent  when
California and  Houston  were excluded.  In September 44 percent
of nationwide exceedances and 22 percent  without  California and
Houston were greater than or equal to 0.14.

     The uncontrolled diurnal index  (UDI)  is another measure of
the desirability of applying RVP control to  reduce the  level of
ozone exceedances,  in this  case  evaluating the likely magnitude
of   evaporative   emissions   in  an   area.    The  indices   are
calculated using the actual  temperature range  of  the  city on
the exceedance date, the atmospheric pressure of  the area based
on  its  elevation,  the  RVP  level  of the area based  on its  ASTM
classification,   and an  assumed  61.5  percent full  gas tank to
account for  fuel weathering and in-use tank  level  variability
(see Chapter 2 of DRIA).

     UDIs  were calculated for the 1985-87 exceedances  in April
and  October.  A UDI equal  to  2.0 represents the UDI  level for
11.5  RVP   fuel  under FTP  certification  temperature  and  tank
level  conditions   (representative  of  current   ASTM  Class  C
areas.)  Areas  with a  UDI  greater than  2.0, therefore,  would
likely  be  in need of  control.   UDIs were  calculated  for  the
April and  October  exceedances  in order to determine the degree
that  evaporative  emissions were  contributing  to  these  ozone
exceedances.    For  the  April   exceedances,   58  percent  were
greater  than  2.0,  with  an  average UDI   of  2.793.   Similar
results occurred in October,  with 62%  of  UDIs being  greater
than 2.0,  and with  an average UDI of 3.311.

     Both  the UDI  and  ozone level  analyses  indicate that ozone
control    during   April    and    October    requires    serious
consideration.   However,  it must be  remembered  that only 3 and
1 percent  of  all ozone violations  occur  in April  and October,
respectively.   Thus,  while the violations are  often severe and
excess  evaporative  emissions  are  high,  the  violations  are
infrequent.  Also,  the  dates on  which these April  and October
exceedances occurred show that control during  only a portion of
each  month may  be  sufficient.   The majority of  exceedances in
April occurred during  the last two  weeks (79 percent),  and in
October  84  percent  occurred   during  the  first  two  weeks.
Therefore,  beginning the  control  period May   l would  likely

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provide  substantial  control  during  the  last  two  weeks  of
April.   While  ending  control  September  15 may only  provide
slight control  in early October,  the small  fraction of  ozone
violations occurring  during October  made the extension  of RVP
control through September less efficient.

     2.    Transition Times for Compliance

     Nearly all  the comments received on this  issue  were  from
refiners  who  stated that  two months  are needed  once refiners
begin  shipping  low-RVP  fuel to mix  down  the high RVP gasoline
•and be in compliance with the low RVP standard.   API commented
that although only  four  to  five  weeks  are currently  needed to
make  the  transition,   lowering  the  RVP  even  further  would
dramatically   increase   the  transition   time    necessary   for
compliance.  API  estimated that  60-65 days  will be  needed for
95 percent of  the low  RVP  gasoline  to  reach the  consumer  with
the more stringent  regulations.   API stated that  the  Faucett
study  (which  was used by  EPA to determine  the  transportation
times  involved in  the  transition)  did not  accurately describe
the transportation and storage times  which would be  experienced
in  a  more stringent volatility  controlled environment  such as
the one proposed by EPA.

     After    conducting    their    own    survey    of   industry
transportation   and  storage times,   API  commented  that  the
estimated times  of  supplying gasoline presented  by  Faucett for
the  current  regulations  appeared   somewhat  low  but were not
unreasonable.    However,   the   estimated  transportation   and
storage  times  under the  volatility proposal  were underestimated
by  Faucett  because  a  "plug  flow"  assumption  was  used  to
describe  the  movement  of  gasoline through the  distribution
system.

     Amoco,  in  agreement  with  API,  stated that   the  Faucett
study  did not  recognize  back-mixing effects in  storage tanks.
They  asserted that  Faucett's plug-flow  assumption   was  overly
optimistic  and  that  the   transition  times  were,   therefore,
underestimated.  Amoco also  stated that the  transport times for
marine movements used in  the study  were  low.  Valero Refining,
in  quantifying the effect  of the proposed  RVP  regulations on
their   operations,   modified   the   Bonner   &   Moore   linear
programming  system to include  a one  month  transition  time as
input  unlike  the  two   months   that   others   were  claiming.
However,  they also mentioned API's two month transition time as
the amount of time that may  actually be necessary.

      In  addition to increased costs, the  problems brought  up in
the  comments  about the  two month transition were  problems of
safety,  driveability and  increased  HC  emissions.  According to
comments,  these  problems  would  occur   due  to   low  RVP   fuel
reaching the  consumer  early in the transition period when  there
may still "be cooler temperatures.

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     In  response   to  these   comments  on  EPA's   transition
assumptions, the  transition times  were  reanalyzed  in  greater
detail in  order  to take into account backmixing  effects.   This
reanalysis used the  transportation and  storage  times from  the
Faucett  study  as  a  basis  in  the  analysis.    Although  some
commenters  felt  these  numbers  weren't accurate,  the  Faucett
estimates  were  in general agreement with API's values.   In any
event, the commenters  did  not provide  sufficient  justification
for EPA to revise the Faucett values.

     The  goal   of the  reanalysis  was  to calculate  the  70th
percentile  transition  time for  a  terminal  to   mix  down  to
compliance from an unregulated Class  C  RVP to a  regulated Class
B RVP.   The 70th percentile  time was  chosen because  refiners
have  some  control over the  distribution system,  being  able  to
send  one  RVP  fuel  to  some  regions  while  sending  another
elsewhere.   However,  this  control  is  not absolute and some fuel
must  reach certain   sites  early  for  another  to  just  be  in
compliance  in  time.    The calculated  transition time  was  an
average  of   transition   times   for   a  one-terminal   and   a
two-terminal  line (in  a  two-terminal   line  the gasoline  goes
through  two  terminals before going  to  service  stations).   The
analysis assumes  70/30 mixing (70 percent new fuel,  30  percent
old fuel)  for the one-terminal line,  and 90/10 and  70/30 mixing
for  the  two  terminals  in a  two-terminal line,  respectively.
Terminals  were  assumed to receive new batches   of  fuel  every
five  days  for  the first terminal, and  every  seven days  for the
second terminal  in the line.   (One-terminal  lines are  assumed
to receive fuel every five days.)

     The transition  time   includes the  transportation time from
the  refinery  to   the  first  terminal  by  pipeline  (9.4  days
according  to Faucett),  the average amount of  time necessary for
the  first  terminal to  mix down  to  compliance  after  the first
batch of new  fuel is received (15 days  for a  one-terminal line,
5 days for a  two-terminal  line);  the average additional amount
of  time  necessary  for the  second  terminal  to mix  down  to
compliance  after  the  first  terminal  is  in  compliance,  if
applicable  (22  days); the  extra  amount of time  needed  for the
70th percentile terminal to come  into compliance  to  account for
the  fact  that  all  the base values  from Faucett were  for the
50th  percentile terminal  (5  days  according  to  Faucett);  and,
finally,   seven  additional  days   to  account for  any  delays.
Thus,  an average  of  about six  weeks appears to  be  needed for
terminal compliance at the beginning of  an RVP control period.

     For service  stations, it was  assumed  that  there was 80/20
mixing in  the  tanks  and,   based on  the  Faucett study,  new fuel
was  received every  three  days.    From   this,  an  average  of  an
extra  five or  six  days   will  be  needed,  above  the  terminal
compliance time, for  service stations to come into compliance.

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     Transition times were also calculated for the  situation  of
an additional mid-summer  RVP  change  (i.e.,  from a Class C  to a
Class B  or a  Class  B  to  a  Class  A  requirement) .   The  same
assumptions as  in  the  above calculations  were used  in  this
analysis.   In  this case since the RVP of the fuel has  a  shorter
range  by  which  to  decrease,   the  transition  time  would  be
shorter than  that for the  first  change of  the  control  season
and would take about 5 weeks for terminal compliance.

     At the  end  of  the control  period,  EPA  determined  in a
similar  analysis  that  the  refineries  can  on  average  stop
producing  the controlled  fuel  8  days  before  the  end  of  the
control period.   This is the amount of  time  necessary, based  on
the Faucett study,  for the 30th percentile  terminal  to  receive
its first batch of uncontrolled fuel from the  refiner.   This  is
not  the  same amount  of  time as  at  the start  of the  control
period because,  after this first batch has been  mixed  in  at the
terminal,   the terminal  is  no  longer  in compliance  with  the
lower RVP standard.

     Therefore,  when  accounting for  backmixing  in the  tanks,
EPA  concluded that  under  the  proposed volatility regulations
the  required  transition time  at  the beginning  of the  control
period  would   be   six weeks  rather  than  the  two months  the
comments suggested.   In  addition,  refiners  can  stop  production
an average of one week early.

     Finally,  the potential  problems  raised by the  commenters
on safety, driveability,  and increased  HC emissions  during the
transition period only  apply to  the  second proposed phase  of
RVP control and are not a factor for the first phase of control.

     3.    Starting and Ending  Dates  for the Regulatory Control
           Period

     EPA proposed a control  period of  May  16  through September
15.  In response  to this, various other periods were suggested
in the comments.   Amoco suggested a two-month regulatory period
of July 1-August  31.   They  reasoned  that when adding  the sixty
day period needed to flush the distribution system, four months
of control  would result.   NRDC and  Chrysler  both stated  that
the  period of control  may  need to be  extended  to  a  five month
period of  May 1  - September 30.  NRDC commented  that  because
ozone  violations  also   occur  outside  the   summer  months,
year-round  controls  on  volatility  may be desirable  to   the
extent    that    they    are   consistent    with   driveability
considerations.   NRDC suggested that  at a minimum,  the  control
period should be  extended into the warmer periods of the spring
and  fall.   Chrysler  suggested  that  this longer  control  period
is  preferable  because  many  southern   areas  have  summer-like
temperatures  before May  16  and after September  15.   They also
commented  that  this  period would  be  less  disruptive  to current

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procedures of gasoline distribution.   The  New Jersey Department
of Environmental Protection  commented  that the  proposed  season
of May  16 through  September  15  is too  narrow to  satisfy the
needs of the Northeastern  United  States.   They stated  that the
Northeast  often  experiences  exceedances  during  April,   early
May,  and  late  September.   They suggested  that  an  intermediate
limit for  volatility could be set  for these  time  periods.   Sun
Oil Co. and NADA  both stated  that  the control period  had  been
appropriately  limited.    NADA  commented   that  since  very  few
ozone  violations  occur  during  the  winter   months,  EPA  is
justified  in  focusing  on  the  four  month  period  of mid-May
through  mid-September.    Volkswagen  suggested  that  a  longer
control  period  (beyond  May  16-September  15)  should  only  be
evaluated after this  regulation has been  implemented to  see  if
an extension is warranted.

     In  order  to  respond  to the comments   received  and  to
determine the appropriate  regulatory control  period,  the  amount
of control  obtained  during  the  transition  period and the RVP
levels at terminals and service stations during the  time  period
of March through mid-November were reanalyzed.

     Using  the  calculated  transition  times,  RVP  levels  at
terminals  and   stations   over   the   summertime  period  were
determined for  different regulatory control  periods.   Two cases
were examined:  one  for  a terminal  compliance period  of  May 1
through  September  30,  and  a  second, for  a  terminal  compliance
period of May -16  through  September  15.   In  order  to determine
the  RVP  level  obtained during  the transition periods  at the
beginning  and  end  of the control  period,  several  assumptions
were  made.   The  partial  control  RVP  levels were  calculated
assuming 70-30  mixing at  the terminals with  seven  days between
new  batches  of fuel  and one-seventh of the total number  of
terminals  receiving  the  new  batch  each  day.   For  service
stations,  80-20 mixing  was  assumed,  with  new batches  coming
every three  days  and one-third  of  the  stations  receiving the
new fuel each day.

     As  shown  in Tables 1-2  and  1-3,  this analysis  showed that
a terminal compliance period of May 1  to  September  30 gives,  on
average,  full   compliance  at  service  stations from May  8  to
September  30  and partial  control  beginning around April  1 and
continuing as  late  as November 8.  A terminal compliance period
of May  16 to  September  15  gives  full station  compliance  from
May  23  to  September  15   and  partial  control  beginning  around
April  15  and   continuing  as  late  as  October  22.   While the
tables  show  the results of  a reductions  to  9.0 RVP, the  times
to blend down to 10.5 RVP  are  the same.

     The  results  of  this  analysis  show  that when  mixing  down
from  an uncontrolled to a controlled  RVP  level,  85 percent of
the RVP reduction at  the service  stations  has been achieved two
weeks  prior  to  the  start of the terminal  control  period.  In
mixing from a controlled to  an uncontrolled  level  at the  end of

-------
                              1-11
                           Table 1-2

                     Transition RVP Levels
Date
March
April
 1
15
30

 1
 8
15
22
30

 1
 8
15
30
May



June

July

August
September  1
          15
          30
October
November
 1
 8
15
22
30

 1
 8
15
Compliance
Refinery
13.50
9.00
9.00
9.00
9.00
9.00 '
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
13.50
13.50
13.50
13.50
13.50
13.50
13.50
13.50
13.50
Period: May 1 -
Terminal
13.50
13.50
13.50
12.86
10.22
9.36
9.11
9.03
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.45
12.28
13.14
13.39
13.47
13.50
13.50
                 13.50
13.50
Service Station

     13.50
     13.50
     13.50

     13.33
     11.10
      9.65
      9.21
      9.05

      9.04
      9.00
      9.00
      9.00

      9.00

      9.00

      9.00

      9.00
      9.00
      9.00

      9.12
     11.38
     12.85
     13.29
     13.45

     13.46
     13.50
     13.50
     Assumes  transition from  uncontrolled Class D  fuel (13.5)
     to controlled Class C fuel (9.0).

-------
                              1-12
                            Table  1-3

                      Transition RVP Levels
Date
March
April
May
 1
15
30

 1
15
16
23
30

 7
14
15
23
30
June

July

August

September  1
          15
          16
          23
          30
October
 6
14
15
22
30
ial Compliance:
Refinery
13.50
13.50
13.50
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
13.50
13.50
13.50
13.50
13.50
13.50
13.50
13.50
13.50
13.50
May 16 - S«
Terminal
13.50
13.50
13.50
13.50
. 13.50
12.86
10.22
9.36
9.11
9.03
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.00
9.45
12.28
13.14
13.39
13.47
13.50
13.50
13.50
Service Stat^

     13.50
     13.50
     13.50

     13.50
     13.50
     13.33
     11. 10
      9.65

      9.21
      9.05
      9.04
      9.00
      9.00

      9.00

      9.00

      9.00

      9.00
      9.00
      9.12
     11.38
     12.85

     13.29
     13.45
     13.46
     13.50
     13.50
     Assumes  transition  from uncontrolled  Class D
     to controlled Class C fuel (9.0).
                                           fuel  (13.5)

-------
                              1-13


the control period,  85 percent.of  the control  at the  service
stations  is  lost  two  weeks  after   the  end  of  the  control
period.    Therefore,   a  control  period  beginning  May   1   at
terminals  would  provide   two  weeks  of   additional,   nearly
complete control  at  service stations  at  the end  of  April  and
some  control   in  early April.   A control  period  ending  on
September  15  at  the  terminals,  however,  would provide  little
added control  at service stations  in October.

     In  the DRIA,  April was shown to  contain more design value
days  (4)  than  either  May (0)  or  October  (1).   Also,   April
contained  at  least  the same  percentage  of ozone  violations  (1
percent,  excluding  Houston  and  California)  as  October  (0-1
percent);  May contained more  (1-3  percent).   The more  recent
analysis  shown  in Table  1-1  here  indicates the  same:   April
contains  a greater percentage  of ozone violations (3  percent)
than  October   (1  percent).   Though  a  greater  percentage  of
October's  violations  are over 0.14 ppm ozone,  its total  number
of such  violations  is  lower,  due to  its  lower  total  number  of
violations.   Therefore, it  appears  more  important  to  obtain
some  control   in  late  April  than  in  early  October  and  a
regulatory  control  period  of  May  1  through  September  15  for
terminals  is recommended.

     2.    State-by-State Volatility Classifications

     As  stated  above,  EPA  proposed  to enforce  the current ASTM
monthly  volatility  classifications  and geographical boundaries,
but  with   proportionally   reduced   RVPs  during   the  control
period.   The  one  change to  the  ASTM system that EPA proposed
was  to   eliminate  the  transition months,  requiring  compliance
with  the   lower  volatility   class   during  months   with  two
classifications.   Marathon supported  compliance  in  accordance
with the ASTM schedule  of  seasonal and geographical  volatility
classes, stating  that  a different EPA-designated control period
should  not be required.  Phillips  supported this, as  well, but
stated  that the current ASTM transition periods should  be kept
since  eliminating them would  significantly  increase  costs  at
the beginning and end of the ozone season.

     GARB  did  not  agree  with  enforcing   the  ASTM  monthly
classifications  or  geographical  boundaries  as  they   apply  to
California.   They  commented  that,   for  California,   the  EPA
system   should   match   California's   current   requirements.
California is currently divided into  fourteen  air basin areas,
with  five different   ozone  seasons.   The   seasons  are  all
contained   in   the   period  of  April-October.    Volatility  is
limited  to 9  RVP during the given ozone season.   GARB commented
that EPA's interim proposal for California is  not as  stringent
as  their  current  system and  that  any regulation should be at
least as stringent as the current one.

-------
                              1-14
     Other  commenters  held   various  opinions   as   to  where
RVP-controlled  fuel   should  be  required.   Sinclair  commented
that the  control  should only  be  required in areas where  it is
needed  (i.e.,  ozone  non-attainment  areas),   and,   therefore,
should  not be  imposed  uniformly  on  all  refiners.   Sinclair
suggested  that  either all  gasoline  refined  in  non-attainment
areas  be  required  to meet  "ultra-low"  RVP  specifications  or
that RVP  exemptions  should be granted  for gasoline  shipped to
attainment  areas.   Sinclair  also  suggested  that   since  the
Rockies and Plains were close  to  being in full  compliance with
the standard,  they may not  need  the proposed  regulation.  Since
only  40  percent  of  the fuel  in  the area is  brought  in from
outside  areas  (namely,  Texas and   Louisiana),  the  regulated
outside fuel  would give enough of an RVP reduction   to  put  the
area in  full  compliance.   SOHIO  stated  that RVP control must be
enforced  in  all  areas  since  refiners  cannot  segregate  the
gasoline   between    attainment    and   non-attainment   areas.
According to  SOHIO,  only segregation over broad  regional  areas
is possible.  (For this reason,  SOHIO suggested that EPA should
exercise  all  authority available  to  preempt  and  prevent  state
volatility regulations.)

     API,  in  agreement with SOHIO's  comment  above,  stated that
the supply system is unable to differentiate  between states, or
parts   of  states,   with   different  ASTM   classes.    As  a
consequence, they say, the lowest  RVP gasoline  for a given area
must  be  supplied to the entire  area.   TOSCO  also  stated that
the development of a patchwork of  different volatility controls
across the country  would  create  uncertainty  for refiners  and
marketers  working to meet a variety of  standards.   This  could
result  in gasoline  supply  problems in  certain  areas of  the
country.   Wickland  Oil raised a  concern about  the   fungibility
of  gasoline.   Since  the gasoline distribution  system is  based
on  fungibility,  they  said,   it   cannot  simultaneously  handle
large  quantities  of  the same  grade  of gasoline  with different
RVPs.  Wickland Oil  currently sends 9.0 RVP  gasoline to  all
areas  which  they  supply,  although  California,  Nevada,  and
Oregon have different  requirements.   Amoco  commented that there
may be driveability  problems  in  those Class C areas  adjacent to
Class  A  areas  (Denver,  El Paso,  Phoenix,  Salt Lake  City).
According  to  Amoco,  some exemptions  may be necessary to  amend
this.

     Volatility  designations  on  a  state-by-state   basis  were
reevaluated  to  determine  if  any changes  to  the current ASTM
class  system should occur.   (EPA  does  not  refer   here  to  a
change  of the  ASTM  RVP classification  system,  but  to an  EPA
system  whose  RVP control  levels  are  a  function  of  the ASTM
levels   for   each  class.)   Dual  classification  areas   (i.e.,
states which  according to the ASTM  system are assigned  either
of  two   RVP  classes  in  a  particular  month   to   allow  for
flexibility   during   transitions)   were   first  examined   to
determine  which single classification  should  be applied to the
area.   For states  with non-attainment  areas,  the  UDI on  the

-------
                               1-15
 design  value day was  the determining factor  in the  choice of
 class.   For  those states without non-attainment areas,  location
 with  respect to  surrounding  class  levels was  the  main  factor.
 A  UDI  analysis  was  also  performed  for single-classification
 areas  to  determine whether  any  changes to  the  current ASTM
 class   system  might   enhance  the  workability  of   the   control
 program without  the   loss  of  non-attainment  area   emission
 benefits.

      In the  NPRM,   EPA  proposed  that   in  dual classification
 areas  the lower  of the two RVP  classes be  the  basis of the
 standard.   This  approach  was  reexamined on  a state  by  state
-basis to determine  how much control these areas need during the
 months  of  dual  classification  to  achieve  the  same  emission
 reduction  as other  areas.   For non-attainment  areas  which had
 dual   classifications    in   any  of  the  months   from   May  to
 September, UDIs  were  calculated  for  the temperature  conditions
 on exceedance days  in that month  with  gasoline at the current
 ASTM  RVP  levels.   Where the  UDIs  in a particular state were
 above   2.0   (2.0  being   the  UDI   level  for  11.5  RVP  at FTP
 certification  temperatures  and  tank  level   conditions),  the
 lower  RVP class  was  generally chosen  for  that state   in  that
 month.

      For   those  dual  classification   areas   which   had  no
 non-attainment   areas,  geographic  proximity   to   states with
 non-attainment  areas was the main  factor in  the decision about
 the  level of the RVP standard.  The standard  was  chosen based
 on the  RVP of surrounding states  and on  the ease with which the
 distribution system  could  get fuel  to  that   state.   Agreeing
 that  the gasoline distribution system cannot easily distinguish
 ASTM  boundaries, as many  comments mentioned,  EPA grouped the
 class   areas  in  various regions   of  the  country  as  much  as
 possible for each month.

      Another UDI  analysis   was performed  to  determine  if any
 changes should  occur  in the  relative  RVP control  levels  of the
 three  classes   which   were based  on the  current  ASTM  class
 system.  As with the  dual-classification  analysis above,  UDIs
 were  calculated  for  1985-87 exceedance  days  using the current
 ASTM  RVP levels.  By  examining both the level  of  the  UDIs and
 maps  of  the current  ASTM  system  and  pipeline networks,  EPA
 constructed  a revised system of  RVP  classes  across the country
 which  retains   most  emission  benefits while  improving the
 manageability of  the  program  for  the  gasoline   distribution
 system.

      Table 1-4  shows  a  list of states  (or parts thereof) whose
 control levels have  been relaxed  and the number  of months  it
 was  relaxed.   The  majority  of the  revisions   affect  Northwest
 states  which contain  no non-attainment  areas  (ID,  MN,  ND,  East
 OR,  SD,  East WA,  and WY) .  These  areas are now  considered  as
 being Class C areas  even though ASTM classifies  them  as Class
 C/B   or Class  B.   Relaxations  from Class  A to Class B  of
 southern  Nevada and  southern  California  were  performed  for
 similar  reasons,  since they  also   contain  no  non-attainment

-------
                              1-16
                           Table  1-4
          States With Relaxed RVP Control Designations
Relaxation from Class B to Class C:
Montana (5)*
Idaho (5)
Wyoming (5)
S. Dakota (5)
E. Washington
E. Oregon (4)
Colorado (1)
N. Nevada (1)
Utah (1)
(4)
Nebraska (5)
Kansas (3)
Oklahoma (1)
Arkansas (2)
Missouri (2)
Iowa (2)
N. Dakota (4)
N. Carolina (1)
S. Carolina (1)
Georgia (1)
Alabama (1)
Mississippi (1)
Louisiana (1)
Tennessee (1)
Relaxation from Class A to Class B:
S. Nevada (5)
SE California (5)
            Arizona (2)          W.
            N.  New Mexico (1)    S.
                       Texas (2)
                       New Mexico (2)
     Number in () shows number of months relaxed

-------
                              1-17
areas.   Arizona  was relaxed  from Class  A  to Class  B  during
September due  to the  fact that  it  would be  the only Class  A
state  in the  nation  during  that  month.    The  "rest  of  the
non-California relaxations were dual ASTM  classifications which
are now being treated  as  the higher of  the  two  classes  rather
than the lower.  These  relaxations were  based on  an analysis of
the UDIs for  the exceedance  days of that month  using the  two
levels of RVP.[1]

     After   examining  California's   exceedances,  EPA  concluded
that those California  areas  which are  currently Class C  or  B/C
are  in  need  of  a  Class  B level  of  control. [1]   Also,  the
southeast area which is currently Class  A during the  period of
May through September  contains  no non-attainment  areas and was,
therefore,  relaxed to  Class  B.   For  these reasons, and  also in
response to CARB's  comment that  the RVP control  boundaries in
California  should  match  their  current  boundaries,  California
was designated  as  Class B  across the entire  state  for  the May
through  September   period.    Table   1-5  shows   all  of  the
classifications  which   were  reexamined  and  the   final  result,
where revisions were made to the proposed control  levels.

     3.    Relative RVP Standards in the ASTM  Class A,  B, and C
           Areas

     In the NPRM, EPA  proposed an RVP limit of 9.0 psi in Class
C  areas with proportional  RVP reductions in Classes A and B in
order  to obtain  equivalent  emission  reductions  in  all three
classes.  The majority of  comments disagreed with this approach
and   stated  that   the   RVP   levels   should   be   based   on
cost-effectiveness  rather  than  proportional  reductions.   This
will  be considered  in EPA's analysis  of  the  final  RVP  level.
Those opposed to proportional volatility reductions stated that
reductions  outside  Class  C  areas are  not  cost-effective.  This
is  considered  in  Chapter  5.   Others  stated  that RVP   levels
below   9.0  psi   in Class  A  and  B  areas  will  also  cause
driveability   and   safety   problems,   thus   compromising  the
performance of  the  vehicle.   This  is an  issue  for  the final
analysis of the second level  of RVP control.

     SOHIO  stated  that there  is  insufficient data  to indicate
that emissions  are  reduced when volatility drops below 9.0 psi,
citing  some data which indicate  that total  exhaust  emissions
increase  as the  fuel  volatility  drops  below  9.0  psi.    Again,
all  this is  not  relevant   in  this  analysis of  the   interim
program.

     NRDC  questioned  whether tying volatility  levels  to ASTM
classes  was appropriate since  ASTM  limits  are keyed  to motor
vehicle  performance,  not   air  quality.   They suggested that EPA
examine  whether lower  RVP  limits would be  appropriate  in  some
areas.

     Phillips  disagrees  with  basing   standards   on   reductions
from  Class  C  RVP levels,  stating that the  test  procedure most
closely matches Class  B   areas  or  possibly a  worst  case Class
C.  Phillips suggested that  test  fuels  be  matched to ASTM Class

-------
                           1-18




                        Table  1-5




Exceptions to the Proposed System Based Only on ASTM Class
State
Alabama
Arizona
Arkansas
California:
North Coast
South Coast
Southeast
Interior
Colorado
Connecticut
Delaware
Georgia
Idaho
Illinois:
North
South
Indiana
Iowa
Kansas
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada:
North
South
New Hampshire
New Jersey
New Mexico:
North
South
New York
North Carolina
North Dakota
Ohio
Oklahoma
(— ii
May
Final
ASTM EPA

B/A
	

	
C/B
B/A
C/B
C/B
D/C
D/C
	
C/B

D/C
	
D/C
	
C/B
	
D/C
D/C
D/C
D/C
D/C
	
	
C/B
C/B

C/B
B/A
D/C
D/C

B/A
B/A
D/C
	
D/C
D/C
C/B

B
	

	
B
B
B
C
C
C
	
C

C
	
C
	
C
	
C
C
C
C
C
	
	
C
C

C
B
C
C

B
B
C
	
C
C
C
idicates no change from ASTM system)1
June July August September
ASTM

	
C/B

C/B
	
A
	
	
	
	
	
B

	
	
	
C/B
B
	
	
	
	
	
	
	
C/B
B
B

	
A
	
	

	
	
	
	
C/B
	
	
Final
EPA

	
C

B
	
B
	
	
	
	
	
C

	
	
	
C
C
	
	
	
	
	
	
	
C
C
C

	
B
	
	

	
	
	
	
C
	
	
ASTM
C/B
	
	

	
	
A
	
B/A
	
	
C/B
B

	
C/B
	
B/C
	
C/B
	
	
	
	
	
C/B
	
B
B

	
A
	
	

	
	
	
C/B
B
	
	
Final
EPA
B
	
	

	
	
B
	
A
	
	
B
C

	
B •
	
C
	
B
	
	
	
	
	
B
	
C
C

	
B
	
	

	
___
	
B
C
	
	
Final
ASTM EPA ASTM
	 	 B/C
	 	 A
B/C

	 	 	
	 	 	
A B A
	 	 	
A/B A 	
C/D
	 	 	
B/C
B C B

	 	 	
B/C B 	
	 	 	
	 	 	
	 	 B
B/C
	 	 C/D
	 	 	
	 	 C/D
	 	 C/D
	 	 	
	 	 B/C
	 	 B/C
B C B/C
B C B

	 	 	
A B A
C/D
	 	 C/D

A/B A 	
	 	 A/B
	 	 C/D
	 	 B/C
B C B/C
	 	 . 	
	 	 	
Final
EPA
C
B
C

	
	
B
	
	
C
	
C
C

	
	
	
	
C
C
C
	
C
C
	
C
C
C
C

	
B
C
C

	
B
C
C
C
	
	

-------
                                        1-19

                                 Table 1-5 (confd)

                        Exceptions  to  the  ASTM Class  System
State

Oregon:
  East
  West
Pennsylvania   D/C
Rhode Island
South Carolina 	
South Dakota
Tennessee
Texas:
  East
  West
Utah
Vermont
Washington:
  East
  West
West Virginia  D/C
Wisconsin
Wyoming
(— i
May
Final
ASTM EPA
D/C
D/C
D/C
D/C
	
C/B
	
_ —
B/A
C/B
D/C
D/C
D/C
D/C
D/C
C/B
C
c
C
c
	
c
	
___
B
C
c
c
c
c
c
c
ndicates no change from ASTM system)
June July Auqust
Final
ASTM EPA
C/B C
	 	
	 	
	 	
	 	
B C
	 	
C/B B
	 	
	 	
	 	
C/B C
	 	
	 __ _
	 	
B C
ASTM
B
	
	
	
C/B
B
C/B
_ __
	
B/A
	
B
— —
	
	
B
Final
EPA
C
	
	
	
B
C
B
_ _ _
___
A
	
C
	
	
	
C
Final
ASTM EPA
B C
	 	
	 	
	 	
	 	
B C
	 	
— « _ — _ _
___ 	
A/B A
	 	
B C
___ ___
___ 	
	 	
B C
September
Final
ASTM EPA
B/C
	
C/D
C/D
B/C
B
B/C
_ __
A/B
___
C/D
B/C
-_—
___
___
B
C
— — —
C
C
c
c
c
— — -*
B
-._-.
C
c
___
___
___
c
     Whe:a ASTM  system  indicated a transition month (e.g., A/B), EPA proposed that
     that area be considered in the lower class.

-------
                              1-20
B volatility  levels  and that gasoline volatility  be  limited to
ASTM's current levels.

     In the NPRM, EPA demonstrated that  adopting ASTM RVP class
standards with  proportional  RVP reductions  in  each class would
provide  roughly  equivalent emissions across  the  country.   EPA
has performed  a new analysis of expected  evaporative emissions
to  examine more  specifically  whether   the  proposed  standards
should be adjusted in order to achieve our goal.

     Essentially, an  analysis  of emissions  on  ozone exceedance
days was performed by  comparing UDIs in Class  A and  B areas to
those  in Class  C  areas for  both  diurnals and running losses.
This  analysis  examined  the  UDIs on a  monthly as  well  as  an
overall  basis.   The proposed  proportional-reduction  RVPs  were
used   in  these  calculations   (9.0,   7.8,    and   7.0).    The
temperatures used to calculate  the  UDI  for the diurnal analysis
were  the  actual  daily   high  and   low  temperatures  of  the
non-attainment  area  on  the  exceedance  date during  1985-1987.
To  simulate  running  losses,  a  second UDI was  calculated using
the  daily high  as  the  initial temperature  and  a temperature
15°F above this as the ending temperature.   The 15°F represents
the  tank  temperature   increase resulting  from  a single  LA-4
trip.  The  mean UDIs  for  each  class on  a  monthly  basis  were
then  calculated.   For Class  A, a  single  city, Phoenix,  has a
large  effect on the  mean  UDI;  calculations  were  made  both
including  and  excluding  Phoenix.    The results  are  shown in
Table 1-6.

     The UDI  levels  for both  diurnals  and  running losses were
as  high  or  higher  in Class  A and  B areas  than  the levels in
Class C  areas.   Therefore, when comparing  the  UDI  levels  in A
and  B areas to  the  level in  C areas,   this  analysis  indicates
that no  increase in  the relative RVP standard levels  from the
proposal  for Class  B  and A  areas  can  be  made if the goal of
equivalent emissions  in all  areas  is desired.   If  any change
were  to  be made, a  decrease for Classes  A and B would appear
necessary.  This is  primarily  an issue  for  the final  level of
RVP control.  However,  it  does  demonstrate that 9.5 RVP control
in Class B areas should be quite beneficial.

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                    1-21

                 Table 1-6
Non-Attainment Area UDIs on Exceedance Days
           Diurnals
Running Losses
Class Month Mean UDI
A



B





C
June
July
August
Total
May
June
July
August
September
Total
Total
1.8137
1.2181
1.0631
1.2990
0.9269
1.2383
0.9954
1.1548
0.9405
1.0863
0.9004
w/o Phoenix Mean UDI
1.6057 3.1366
1.2181 1.8338
1.0631 1.5920
1.2005 2.0497
1.1906
1.7865
1.5512
1.7169
1.3304
1.6112
1.5352
w/o Phoenix
2.4567
1.8338
1.5920
1.8088








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                           Chapter 2

           Effect of RVP on Vehicle Emission Factors
I.    Synopsis of NPRM Analysis

     The  estimation  of  the  effect  of  fuel  RVP  on  vehicle
emissions  is  very  complex,  especially  that  for  evaporative
emissions.   In  the Draft RIA, EPA  utilized two  distinct  types
of  models   to  estimate  evaporative  exhaust   and  refueling
emissions.

     The  most  complex  model  applied  to  the  estimation  of
diurnal  emissions.   Here  a  chemical  equilibrium  model  was
developed  to  predict   the   relative   effects   of   fuel   RVP,
temperature   and   vehicle  fuel   tank   level   on   fuel   tank
emissions.   The   estimated   fuel   tank  emissions   were   then
correlated against  the diurnal emission test results from EPA's
in-use  emission  factor  program  to  provide  in-use  emission
estimates over  a  wide range of climatic  conditions.   The  model
was  also  used  to  generate suitable  average  in-use  fuel  tank
levels  to  account  for  fuel  weathering,  RVP and  temperature
variability  and  the wide  range  of  fuel  tank  levels occurring
in-use.   The assumptions behind this  model were  shown  to hold
when  applied against the test results of  a smaller  number  of
vehicles  which were  tested  over 27  different combinations  of
fuel RVP and temperature.

     The models used to  estimate hot-soak and exhaust emissions
versus   RVP   were   much  simpler.     They   primarily  involved
correlating measured emission test  results  under  FTP conditions
versus  fuel  RVP.    These  correlations  were  used  directly  to
represent emissions in Class C areas.  For  Class  A and B areas,
it was  assumed that  their  emissions were  the  same  as those of
Class C areas when their respective  fuel  RVPs matched the ratio
of ASTM RVP limits.  For  example,  emissions  in  all areas were
equal when  Class  A,  B,  and C fuel  RVPs  were  9, 10  and  11.5,
respectively, or 7.0, 7.8 and 9.0 respectively.

     The  model  used to estimate  the effect  of  fuel  RVP  on
refueling emissions was  developed  primarily for  the  Draft  RIA
in support  of onboard refueling emission standards.[1]   It had
been published  prior  to  its use in the Draft RIA for gasoline
volatility   control  and   received   substantial  comment  and
reanalysis.[2][3]   No comments  were  received with sufficient
technical  support  to warrant  changing this  model  here.   Thus,
it will not  be discussed any further.

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                              2-2
II.   Summary and Analysis of Comments

     In  general   comments   on  the   evaporative   and  exhaust
emissions models contained  in  the  DRIA fell into  the  following
five categories:   l)  accounting for weathering  of in-use fuel,
2)  the  representativeness  of  temperature,  RVP and tank  fill
level  inputs  used  to   calculate  emission  factors,  3)  the
validity  of  the  UDI   correlations  developed  for  predicting
controlled diurnal emissions,  4) the accuracy of EPA's emission
factor testing  and 5)  the  magnitude of the effect of  ethanol
blends  on  evaporative  emissions.    Comments  in  each of  those
areas are examined in more detail below.

     A.     Fuel Weathering

     Comments  submitted  by Texaco,   General  Motors,  and  API
maintained that  the effects of  weathering  were not considered
in  the DRIA  vehicle  evaporative  emission  analysis.   EPA stated
in  the  DRIA  that  fuel  weathering was  an  important  factor  in
assessing  vehicle  evaporative  emissions   and,   in  fact,  the
decrease  in   vehicle  fuel  RVP  as  a  result of the weathering
phenomenon was  taken  into  account  in the  vehicle evaporative
emission analysis.

     The DRIA considered two basic categories of evaporative
emissions  generation:     1)  hot-soak   losses   and  2)  diurnal
losses.   As  explained  on page  2-34 of the DRIA, fuel weathering
was  not  included  in  the hot-soak  emissions  analysis  because
neither   ambient  temperature  effects   nor   the   effect  of
temperature  and RVP  variability   have been  included  in  the
hot-soak  model.    It  is also explained  that  including  these
effects would largely  offset the predicted decrease in hot-soak
emissions  due to  fuel weathering.  No evidence  was  presented
demonstrating that these effects  did  not  or  could  not offset
each other.

     The   effects   of   fuel   weathering   on   vehicle  duirnal
evaporative  emissions  were  described in the DRIA  on pages 2-71
through  2-89.   It  is concluded  in  this section that the effect
of  weathering and  the  variability  in  in-use fuel  tank levels
can be  incorporated into the  average  fleet evaporative in-use
fuel  tank  fill  level.   The  analysis  presented   in  the  DRIA
calculates a design value  day in-use  fuel  tank  level of 61.5%
which accounts for fuel  weathering,  RVP variability and average
in-use  fuel   tank  level.   Similarly  the value  of 53.1% in-use
fuel  tank  level was  calculated for  July  average temperature
emissions  modeling which similarly  incorporates  the effects of
fuel  weathering,  RVP   variability,  average  in-use fuel  tank
level,  as  well  as July  temperature variability.   These values
were used,  as stated in  the DRIA,  for  the city-specific MOBILES

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                              2-3


environmental  analysis  runs.   Without  the  consideration  of
weathering, these  fuel  tank  levels  would have been  much  lower
and emissions much higher.

     B.    Emission Factor Modeling Inputs

     In general  comments related  to the  representativeness  of
the  data  used to  calculate  evaporative  emission  factors  fell
into three categories:   1)  temperature data, 2) RVP  values and
3) in-use  fuel tank  fill levels.  Texaco objected to the use of
a  single  design  day  temperature  for  estimating  emissions.
While  EPA  agrees  that   use   of  additional  high-ozone  day
temperatures  would improve  the  analysis,  such information  is
difficult  to  gather  for  61  cities each year as the design value
day is changed.  Also, EPA's analysis does not focus  on any one
city,  but  on all  61  cities, so  the variation in  the "average"
of  the 61 temperatures  should   be  guite  small  regardless  of
whether 1,  2 or 3 days  were used for  each  city.   No commenter
presented  a suitable alternative to  the inputs used in the DRIA
analysis.

     Commenters  also  stated that  EPA  should not have increased
each   area's   RVP   to  the   ASTM  maximum  limit  if   it  was
historically  below  that  limit.   They  stated that the  fuel
distribution  system  was  such  that  lower  limits in  adjacent
states often-kept  fuel in a given  state below  its. maximum level.

     EPA's  reasoning  in raising  the levels  to  the ASTM limits
was  that  levels  have been rising  nationwide over  time  as  newer
vehicles  were designed  to  handle higher and higher fuel RVP.
In fact,  since some areas are already  above their ASTM limits,
the  use   of  these  limits   could be   considered   conservative.
Also,  the  economic incentive to  add butane to  gasoline  is the
same  at  high or  low  RVP.   Only  vehicle  performance,  which is
also  a function  of  climate, vehicle model,  and maintenance
level, holds RVP  in  check.   The  role  of high RVP in hindering
vehicle performance is often masked  by these other  factors.

     On the other hand,  EPA now  has  two additional  years'  of
MVMA summertime  RVP  surveys (1986 and  1987) and levels have not
been rising.   Thus,  at  least for this analysis of interim RVP
control,  1987 RVP levels will  be assumed  to hold constant in
the  future absent RVP controls.   These   revised  baseline RVPs
are  shown  in  Table 2-1.

     C.    UDI correlation

     Texaco   and API  pointed  out. that  the  UDI  equations for
predicting duirnal emissions were  derived from an  EPA data base
limited to three  RVP test  conditions.  While  this data base is
limited with respect  to  the number  of  test  conditions,  the EPA

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                              2-4
                           Table  2-1

                In-Use Fuel Volatility  (RVP)  Data

MSA/CMSA Name                             In-Use RVP* (psi) 1987

Boston MA                                           10.8
Greater Connecticut                                 10.8
New Bedford MA                                      10.8
Portland ME                                         10.8
Portsmouth-Dover-Rochester NH-ME  .                  10.8
Providence RI                                       10.8
Springfield MA                                      12.8
Worcester MA                                        10.8

Atlantic City NJ                                    11.4
New York NY                                         11.2
Vineland-Millville-Bridgeton NJ                     11.4

Allentown-Bethlehem PA-NJ                           11.4
Baltimore MD                                        11.0
Erie PA                                             11.7
Harrisburg-Lebanon-Carlisle PA                      11.4
Lancaster PA                                        11.4
Philadelphia PA-NJ                                  11.4
Pittsburgh PA                                       11.7
Reading PA                                          11.4
Richmond-Petersburg VA                              11.0
Scranton-Wilkes Barre PA                            12.2
Washington DC-MD-VA                                 11.0
York PA                                             11.4

Atlanta GA                                          10.7
Birmingham AL                                       11.5
Charlotte-Gastonia-Rockhill NC-SC                   10.7
Chattanooga TN-GA                                   10.7
Huntington-Ashland WV-KY-OH                         11.0
Louisville KY-IN                                    11.0
Memphis TN-AR-MS                                    10.7
Miami-Hialeah FL                                    10.3
Nashville TN                                        11.5
Tampa-St.Petersburg-Clearwater FL                   10.3
     In-Use RVP associated with ozone design value  day.

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                              2-5
                           Table  2-1
                           (continued)

                In-Use Fuel Volatility  (RVP) Data
MSA/CMSA Name
Akron OH
Canton OH
Chicago IL
Cincinnati OH-KY-IN
Cleveland OH
Dayton-Springfield OH
Detroit MI
Grand Rapids MI
Indianapolis IN
Milwaukee WI
Muskegon MI

Baton Rouge LA
Beaumont-Port Arthur TX
Brazoria TX
Dallas-Ft.Worth TX
121 Paso TX
Galveston-Texas City TX
Houston TX
Lake Charles LA
Long View-Marshall TX
New Orleans LA
San Antonio TX
Tulsa OK

Kansas City MO-KS
!3t. Louis MO-IL i

Denver-Boulder CO**
Salt Lake City-Ogden UT**

Phoenix AZ
                                     In-Use  RVP*  (psi)  1987

                                               11.7
                                               11.7
                                               11.6
                                               11.7
                                               11.7
                                               11.7
                                               11.5
                                               11.6
                                               11.6
                                               11.6
                                               11.6

                                               10.7
                                                9.9
                                                9.9
                                                9.9
                                                9.0
                                               10.7
                                               10.7
                                               10.7
                                                9.9
                                               11.4
                                               10.3
                                                9.8

                                                9.8
                                               10.1

                                                9.7
                                                9.7

                                                8.5
 **
In-Use RVP associated with ozone design value day.
High-altitude area.

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                              2-6
emission factor  data  base contains  hundreds  of vehicle  tests,
by far the  largest  of  its kind,  representing the broadest range
of vehicle  types, model  years,  etc.   Also,  it  is  important  to
note that additional data at  27  test conditions obtained in the
ATL study described in the DRIA  follows the same trends  as  the
EPA date.   This  additional data  is presented  in Figure  2-10  of
the DRIA and supports  the  best fit  polynomial  equations  derived
from the  EPA data.   In  fact, use  of  the emission  averages  of
the ATL data  at  the three EPA test conditions  does  a  very good
job of  predicting  all  27 data points.   Thus,  absent a  better
approach,  EPA will  continue to  use the  UDI  model based  on  EPA
test conditions.

     As an  alternative to EPA's model, a number of oil and auto
companies  submitted,  and recommended  that  EPA use,  a  model
recently developed  by Radian,  Inc. under  the  auspices  of  the
the  Coordinating  Research  Council.   This  model  contains  a
number of  features  not  able  to  be considered  in  the  Draft RIA
model,  like the  amount  of each  day's diurnal  temperature rise
idle vehicles  tend  to experience.   However,  the model  at this
point   in   its   development   contains   a   number   of   major
disadvantages relative to EPA's which argue  against its  use at
this time.

     First,  and  foremost,  the  model  is entirely  statistical,
consisting  of  correlations  of  data  versus   test  parameters.
This prevents its use  outside of  the  test conditions,  since no
engineering  model  is  used  to  demonstrate  the  validity  of
extrapolation.   Unfortunately,  the  range   of   summer  climates
occurring in  the U.S.  is much wider than the range of test data
and extrapolations must be performed.

     Second,  some of  Radion's statistical techniques  result in
the  consistent   underestimation  of  measured emissions  even at
the test conditions.   This arbitrarily leads to a  reduction in
the estimated effect of RVP on emissions, which  is unacceptable.

     Third,  the  most  apparent advantage  of  the Radian model in
estimating  partial diurnal may not  be  as  strong as it initially
appears.    Diurnal   emissions  are   a  function  of  available
canister  capacity,   as  well  as  fuel  tank  emissions  to  the
canister.   Recent  modelling by EPA of the  interaction  of tank
vapors,  canister   loadings,  and   purge  rates  to  the  engine
indicates  that  canisters are  likely  full  at  the end  of  the
day. [4]  While more work needs  to  be  done in  this  area, EPA's
running loss  testing  confirms that many vehicles' canisters are
fully  loaded at today's  RVPs on  high  temperature  days  typical
of  high ozone   conditions.[5]  Thus,  at  least at  the  initial
conditions  of this  interim RVP  control analysis, EPA's emission
factor  test  conditions   of  a complete  diurnal  with a  purged

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                              2-7


canister  is  almost  certainly  more   accurate  than  Radian's
partial  diurnals  with  a  purged  canister;   reality  being  a
combination of partial and full diurnals with a full canister.

     D.    Accuracy of EPA Emissions Modeling Testing

     API  and  Sun  Refining  and  Marketing  Company  expressed
concern over  the representativeness of  the data base  used for
omissions  modeling.    Specifically   fuel   blending   and   the
accuracy of  measurement of tank  fuel  temperatures  during  test
procedures were questioned.

     With respect  to fuel blending Sun  Oil presented test data
for a  single  vehicle showing  that it was the  difference  in the
high-end volatility  (T90)  of EPA's  9  and  11.5  RVP test fuels,
and  not RVP,  that  caused  the  exhaust emission   effect.   In
contrast, EPA's  own  comprehensive  testing  of  a  vehicle showed
that  it  was  not  any difference  in the  liguid fuel,  but  tank
vapors generated during the test, which caused the effect.[6]

     Recent  running  loss test  results  indicate  that  exhaust
emissions are strongly  affected by tank vapors,  much more than
EPA's  emissions  factor  testing would  indicate.[7]   Thus,  even
:.f part of the  effect seen with the emission  factor testing is
due  to differences   in  Tgg,  the  whole effect  estimated using
EPA's  emission factor testing likely  underestimates the effect
i.n-use.  Thus, the DRIA analysis will continue to be used.

     E.    Ethanol Effects on Evaporative Emissions

     The  Ad  Hoc  Ethanol  Committee  submitted  technical  data
describing the average  volatility  increase  for ethanol blended
fuels.   Their data  resulted  in a  0.76  psi RVP  increase for  a.
10%  ethanol  blend in gasoline  rather  than  the  1  psi increase
used  by the  EPA for  its  analysis.  Further  data  submitted by
API  also  supports  this 0.76  psi  RVP  increase  at 11.5 gasoline
RVP.[8]   However,  API's  model  is  more realistic  in  that  it
estimates an  RVP increase which  depends on the  base fuel RVP.
Thus,  since  the two  models match  at their  commonality, but the
API  correlation  is  more  flexible,  the  API   correlation  is
preferable.   However, since  a  temporary allowance  of  1  psi is
being  granted to ethanol blend, until  the final analysis of the
second level of RVP  control,  this factor  is not an  issue here.

III. Final Analysis

     The  analysis of  comments  presented  above  indicates that
EPA's   DRIA  emission   factor  models   are   still   the  most
expropriate  to use.   EPA is continuing  its development of these
models and improvements will  be  forthcoming with the release of

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                              2-8
MOBILE4 later  in 1989.   However,  the modifications  envisioned
lead  to  an  increase  in  the  emissions  effect  of  RVP.   A
preliminary  analysis  of  these  revisions shows  this  increase
could be quite  substantial.[9]   Thus,  continued use of the DRIA
would be very  conservative.   As  shown in Chapter 5,  use  of the
DRIA estimates  still  results  in  a very  cost  effective interim
program.  Thus,  for simplicity,  the  continued use of  the DRIA
estimates is  sufficient.   The preliminary  inclusion  of running
losses, etc.,  referenced  above,  will  only  be used to indicate
sensitivity  and direction  of  effect.   Use of  revised emission
factor  models  will  be  reserved  for the  final  analysis  of the
second  level of RVP control.

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                              2-9
                     Reference - Chapter 2

     1.    Draft   Regulatory    Impact   Analysis:     Proposed
Refueling   Emission   Regulations   for  Gasoline-Fueled   Motor
Vehicles, Volume  I,  Analysis of  Gasoline Marketing  Regulatory
Strategies,  U.S. EPA, OAR, July 1987.

     2.    Evaluation  of  Air  Pollution  Regulatory  Strategies
for Gasoline  Marketing Industry,  U.S.  Environmental  Protection
Agency,  Office of  Air  and Radiation,  Office  of  Air  Quality
Planning  and  Standards,   and   Office   of  Mobile   Sources,
E]?A-450/3-84-012a  (Executive   Summary  -   EPA-450/3-84-012b).
July 1984.

     3.    Evaluation  of  Air  Pollution  Regulatory  Strategies
for Gasoline  Marketing  Industry — Response to Public Comments,
U.S.  Environmental  Protection   Agency,   Office  of   Air  and
Radiation,  Office of  Air Quality  Planning  and  Standards,  and
Office of Mobile Sources, EPA-450/3-84-012c, July 1987.

     4.    David  B.   Bartus, PT  Evaporative  Emissions  Model,
Description  and Users  Guide,  U.S.  EPA,  OAR, QMS,  ECTD,  SDSB,
September 1988.

     5.    Running Loss  Test  Program:   Interim Results,  U.S.
EPA, OAR, QMS, ECTD,  SDSB, September 16, 1988.

     6.    Alan  E.  Schuler, Effects of Gasoline Volatility on
th.e  Hydrocarbon  Exhaust  Emissions  From  a  1984  Oldsmobile
Cutlass, U.S. EPA, OAR, OMS, ECTD, SDSB, August 1987.

     7.    Exhaust  Emissions on  Repeated  LA-4s, Running Loss
Test Program,  Data Extracted from MICRO Data  Base,  January 18,
1989.

     8.    Letter from Dr.  Terry F. Yosie,  API,  to Mr. Charles
L. Gray, Jr., June 28,  1988.

     9.    Memorandum   to  The  Administrator,  The  Effect  of
Vehicle  Running Losses  on Future  Ozone Non-Attainment, from Don
Clay, Acting  Assistant  Administrator, October  6,  1988.

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                           Chapter 3

                      Environmental Impact

     This chapter  examines  the environmental  impact  associated
with the  interim  control of  RVP.   It discusses the  control  of
VOC  emissions  in  order  to control  tropospheric ozone  levels;
including  discussions  of  the  need  for  ozone  control,   the
expected emission  reduction  effect of these  controls,  and  the
impact of the controls on ozone levels.

I.    Need For Ozone Control

     A.    Synopsis of NPRM

     Ozone  is  a  powerful  oxidant  which  is  formed  in  the
troposphere  by  photochemical  reactions  of  volatile  organic
compounds  (VOC)  and  oxides  of nitrogen  (NOx).   Ozone  affects
humans by  irritating the respiratory  system and reducing  lung
function.  Laboratory  studies  suggest  that  it also may actually
damage   lung   and   other  tissues.    This  damage   may  impair
breathing  and reduce  immunity to  disease  for  people  in  good
health,  and   may  be   even   more   severe  for   people   with
pre-existing  respiratory  diseases.    In  plants,   oxidation  by
ozone  can  impair  tissue function  and  reduce the yield  of  some
crops.   Oxidation by  ozone  may  also  damage  materials  such as
rubber products.

     Although   various. HC .  controls    have,   already   been
implemented,  many areas of the nation continue to violate the
ozone  NAAQS.   Based on  the  three-year  period of  1982-84,  EPA
determined  that   73  urban   areas  were   exceeding  the  ozone
standard.  (Twelve of  these areas are located  in California.)

     In  order to determine  the  need  for  future hydrocarbon
control, EPA  looked not only  at  the  present  state  of ozone air
quality,  but  also  at  projected future  air  quality  trends.
Estimates   of  future   air   quality  were  made   for   the  61
non-California urban  non-attainment  areas.   (Since  California
has  separate  motor vehicle standards, California non-attainment
areas  were   not   modeled.)     Current   attainment   areas  were
excluded  from the  future air  quality projections  even though
some of  the areas were  close  to  the  standard and  may have been
projected  to  become  a non-attainment  area in the  future.   The
air  quality  modeling  relied  on  certain  assumptions regarding
emission  rates,   growth rates,  control  technologies,  emission
standards,  and control efficiencies that are  described in more
detail in the following sections.   Based  on  these analyses of
future air quality,  EPA projected  that there  will  likely be
improvements  in  air quality from 1988 to 1995 due  to the effect
of   current   emission   standards  for   mobile  and  stationary

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                              3-2
sources,  but that most of  the large urban areas modeled  remain
in  non-attainment   throughout this  period.   However,  without
further  controls,   growth   is   projected   to   offset   these
improvements and  to  cause the  problem to  worsen after  1995.
Based on estimates  made by the EPA, VOC emission  reductions  of
50 to  80  percent appeared  to be necessary  to bring  some urban
areas into compliance.

     Both the  proposed  volatility  regulation and the  proposed
refueling  regulation  result   in emission   reductions  in  both
non-attainment  and  attainment areas.   The  need  for   control  in
non-attainment   areas   is  evident.    It   is   also,   however,
beneficial to control volatility (and  hence, VOC  emissions)  in
attainment  areas.   Two  key  ozone  benefits  were  noted  in  the
NPRMs.   Because VOC emissions from  one area  may be  transported
through the atmosphere to  another area,  emissions in attainment
areas  can  add  to the   problems  in   non-attainment  areas.
Therefore, controlling  emissions in attainment  areas will also
help non-attainment areas to reach compliance.

     B.    Summary and Analysis of Comments

     The  comments  received   concerning   the need   for  ozone
control addressed  many  different aspects  of this  issue.   These
many  aspects,  however,  fall  into three  main  areas:   1)  the
health effects  of  ozone exposures, 2) the  extent of the ozone
problem, and 3) the more  general issue  of the type  of control
needed.

     1.    Ozone Health Effects

     Comments  on health  effects varied greatly.  NRDC stated
that  at  concentrations  of  50  percent  of  the  current  ozone
NAAQS,  suppression  of  the immune  system has been  observed in
laboratory  animals.   The  American  Lung Association  (ALA)  also
agreed  that the  current   ozone standard  does  not  adequately
protect  public health.   ALA  commented  that clinical   studies
have shown  that adverse respiratory health effects  result from
experimental  ozone  exposure  at the  current  standard  level.
NESCAUM stated  that ozone pollution is  one of  the most  serious
and widespread public health  problems  in the Northeast U.S.   It
also stated  that recent health  data strongly suggests that the
existing ozone NAAQS may not  be  strict enough to protect public
health.   It  also  claims  that  much  terrestrial  damage  has
occurred due to ozone exposure  at ambient  concentrations well
below the current health standard.

     Others commented, though,  that any health effects are very
short  term  in  nature  and that those  showing health  effects
recover   quickly.    API   commented   that   the   line   between
attainment  and non-attainment  seems   arbitrary  and   that  it is

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                              3-3


improbable  that  any   real   public  health   consequences   are
associated   with   the   transition   from   non-attainment   to
attainment.

     Commenting on  the  margin of  safety required by  the Clean
Air Act,  Chrysler felt  that  it is irrelevant  whether  or  not an
area is  projected  to be  in  borderline  compliance,  as long as
they  reach   attainment.   It   felt  that  there  already exists  a
significant  safety  margin built  into the  current standard to
protect  public  health.   Therefore,   it  argued,  as  long  as
compliance is met,  no  extra  margin of safety  is  needed.   NRDC,
however,  stated  that recent   scientific  evidence  shows that the
ozone NAAQS  will have  to  be   tightened  in order  to protect the
public health with an adequate margin of safety.

     These comments  demonstrate that  additional information may
be needed to resolve concerns  about the appropriate level of
the  ozone  standard.   This   rulemaking, however,  is  not  the
proper  forum to  attempt  such  a   resolution.    The  Agency is
already  investigating this issue  in its periodic (5-year cycle)
review   of   each   NAAQS.     Should   it  be   determined   that
modifications to the current ozone standard are necessary,  they
will be  made in a  separate  rulemaking.   At this time,  control
decisions have to be based on the current standard.

     In  response to Chrysler's comment,  it  is  true that the
Clean Air Act  requires  an adequate margin of  safety  to  protect
the  public  health.   Thus,  EPA does  not  base  its  regulatory
decisions on areas   that  are in "borderline  attainment".    This
does not, however,  mean that the extent of an  area's compliance
is  irrelevant.    Concerns such as  NRDC's  on   the  margin of
safety,   as  well  as   concerns  about   the  accuracy  of   ozone
projections, make the projection of an  area  to be in borderline
attainment very significant.

     2.    Extent of Ozone Problem

     Regardless  of   the level  of  ozone at  which  an unhealthy
environment  exists,  the  extent   of  the  ozone  problem   which
exists  in the nation is  also under debate.   Phillips Petroleum
commented  that  few urban  areas   frequently   or  significantly
exceed  the  ozone standard.   It  also commented  that,  with the
exception of Southern  California,  the ozone problem  is  largely
unnoticed  by the general public since  exceedances of the  ozone
standard are so few.   Other commenters  also  noted that  on an
hour-by-hour basis,  most  areas are in compliance with the  ozone
standard more than 99 percent of the  time.   API agreed with the
I2PA  that  there  is  an ozone  problem,  however,  it  felt   this
problem  has  been overstated  by the  EPA.   Sun Oil  also felt  that
EPA  has overstated  the problem.   They  believe that,  except for
the  Los  Angeles   area,   most  non-attainment  areas  are  in
compliance  with the ozone  standard  during most of  the summer
ozone   season.   MVMA   commented  that   the   EPA  has   already

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                              3-4
determined   through   its   NAAQS   process   that   an   ozone
concentration of  0.12  ppm or less is by  definition  adequate to
protect public health and welfare from any adverse effects.

     Many comments  stated that the  EPA has over-estimated  :he
current  ozone  problem   because   the  method   for  determ:  ing
whether or not  an area was  in attainment was  erroneous.    .hey
feel that  the method does not represent  a  quantitative vv v of
ozone  exposure  and  it  overstates exposure  duration  and  ..otal
population  exposure.    Sohio   and  API  both  commented   that
determining attainment or  non-attainment  with  a  single monitor
is  unrealistic  and  overstates  the  problem.   Sohio  feels that
the  average  of   all   monitors   in  the  area  may   be   more
representative  of typical ozone  season  air  quality.   API  and
Sohio  stated that  overall  ozone  levels  are well  below  the
standard,  but  that  the  current  method  of  reporting  ozone
non-attainment data  does  not  show that.  Sohio also  feels that
since  the design value  is  based on a  reading  from  a  single
monitor,  it  does  not  show  the  progress achieved  in  reducing
ambient  ozone  levels,   and,   therefore,  does  not measure  the
extent  of  non-attainment.   Sohio  commented that  monitors with
exceedances may not  be  in highly populated areas.  It said that
in most  non-attainment  areas,  the population  living  or working
in  the area  is much lower than  the  total  population.   API and
Sohio  also  stated  that  under  the current  method,   one  year's
data,  even if  it  is uncharacteristic, is enough to keep an area
out of  attainment for  a three-year period.   One  last commenter
questioned whether  or  not  a  one-hour  standard  for  ozone  was
appropriate.    They  believe  that a  more  practical  long-term
solution would  be going  to an eight or twenty-four hour average
standard.

     EPA  does not  deny  that  ozone  levels  in urban  areas  are
generally  below  the  level  of   the  standard  (0.125  ppm)  the
majority  of  the  time,  nor  does   it  claim  that  its monitoring
system  reports  an  ozone level  to   which  the  entire  area is
exposed.   Nevertheless,  it  does  maintain  that  its  current
method  of  determining  air  quality,  with  respect  to  ozone
levels,  is  reasonable.   This  is  because the  Agency considered
these  issues  in  setting  the  level  of  the standard.   It  was
decided  that  one-hour  ozone  concentrations greater  than  0.125
ppm,  in any  part  of an area,  more than  once  per year would be
indicative  of  unacceptable   air   quality.   EPA  will   consider
comments  on  modifying the nature of the ozone standard  at the
appropriate time  in  its review of  the ozone NAAQS.  However, as
noted  before,  such  modifications are clearly  beyond the scope
of this rulemaking.

     3.    Necessary Control Programs

     Many  commenters  stated that  because   many  areas in  the
nation  still  have not  reached attainment of the ozone  standard,
further  control of  HC  emissions  is  necessary.   Some commenters

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                              3-5
argued  for  volatility  controls,  some  argued  for  refueling
controls,  and  some  argued  for   both.   The  Texas  Air  Control
Board felt that onboard controls would be  a  very  cost  effective
strategy,  as did  API and many other  commenters.   API,  however,
does note  that before forcing  costly hydrocarbon controls,  it
would be  useful  to have  a  better understanding  of  the  role of
NOx,  the  role  of  transport,   and   the   overall  hydrocarbon
inventory.   It  cited the "National Acid Precipitation Report",
stating   that   two-thirds   of   VOC   emissions   east    of   the
Mississippi  and  three-fourths   of  VOC  emissions west  of  the
Mississippi  are from  natural  sources.    The  Conservation  Law
Foundation  of  New England  (CLF) agreed with EPA's  assumption
behind the proposed volatility  rule that vehicle-based controls
alone   are  not   enough   to   address  the   short-term  ozone
non-attainment  problem.   This  is  because  emission  reductions
firom  such  controls  only  occur  after  a  long period  of  time
needed  for  fleet  turnover.   It also felt  that the  EPA  was
correct  in  realizing  that  emission reductions  beyond  those
available  at zero  cost  are  necessary   to achieve  short-term air
quality  improvement.   It felt  that the in-use fuel volatility
restrictions are  technically feasible  and cost  effective,  and
thus should  be adopted.   NRDC and the American Lung Association
felt  that  HC  reductions  beyond those  currently  required  in
non-attainment  areas are  necessary  to  protect  public  health.
They felt  that volatility,  onboard,  and  Stage II  controls are
all  necessary  to  achieve  attainment.   NRDC stated that  $2000
per ton should not be a cost-effectiveness ceiling for ozone or
carcinogen  controls.   NESCAUM,  in   commenting  on  the  ozone
problem  in the Northeast,  stated that  long-term  attainment of
the  ozone  standard  can  only be  reached  through  a regionwide
program  based  on  all  available control  strategies.    It  also
felt that  a reason for the failure to attain the ozone  standard
in  the  Northeast  has  been  an  incomplete  understanding of the
complex  process  of  ozone  formation.   This would  lead  some
states  to underestimate  the  required  reductions  to  meet the
ozone   standard,   and   to   overestimate   the  ozone  reductions
obtained from various control measures.

     Some  commenters, however, felt that there is not  a problem
of  ever-worsening air  quality.   Therefore, they  claim  that no
nationwide   "crash"  program  is  needed   to  reduce  emissions.
Toyota  felt that  the  effectiveness of current control  programs
is being underestimated by EPA.

     Clearly there is disagreement as to whether  the  proposed
controls   are   necessary.    However,   none  of  these   comments
provided  sufficient  rationale  to  change  EPA  position on VOC
control.   The  Agency remains  convinced  that cost effective VOC
controls  are the  most appropriate ozone strategy  at this   time.
(It  should  be noted  that  a  $2000  per  ton cost-effectiveness
ceiling,   as  NRDC   implied,  does  not  exist  in  EPA's   ozone
policy.)    Thus,   the   argument  presented  by  the  automotive
industry   that  refueling  emissions  should  not  be  controlled

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                              3-6
since they only account for two percent of the VOC  inventory is
not  valid;  size  of  the  reduction  is  not  important,   cost
effectiveness is what matters,  since many smaller  benefits  ^an
account  for  large  reductions when considered  together.   In
regard  to DOE's  comment,  it  should  be noted  that  EPA  lid
consider  both  short-term  and  long-term  costs  and  bene.-ts
before proposing these controls.

     It is true that natural VOC emission  can play  an impor-tant
role in ozone  formation,  and in fact, EPA is investigating this
issue.  The other   issues  such  as  the  role  of  NOx  and  of
transport   are   also  important  and   should  be  investigated
further.   Nevertheless,   this  does  not  alter  the  fact  that
control   of  VOC   emissions   such   as  gasoline  vapors  is  an
effective means of reducing ozone levels.

II.  Emission Inventories

     A.    Synopsis of NPRM Analysis

     In  order   to  estimate  the environmental   impacts  of  the
control options,  a computer  model  was first used  to calculate
VOC  emission factors in  grams per  mile.  The  emission factors
were   calculated   for  exhaust,  evaporative,   and  refueling,
hydrocarbon  (HC)   emissions,  and   were  multiplied   by  VMT
estimates   to   obtain  inventory  projections   of-  future  VOC
emissions.   The  inventory projections  in  turn were  used to
determine  the  emission  reductions  from the  various  control
options.

     The  version  of MOBILES  used  in  the   DRIA  analysis  was
different  than the  released version.  In order  to  incorporate
RVP  effects  and  refueling  emissions,   the  analyses  used an
in-house   version   of   MOBILES   (hereafter   refered   to   as
MOBILE3.9).    Since   evaporative   emissions   are  dependent  on
temperature, the  in-house version  also allowed  for  the  use of
climatic   data  reflecting  actual   temperatures  in  the  areas
modeled.   This model  was used for  both the RVP and refueling
analyses.   The  analyses  differed,  however,  in that  the  RVP
analyses   incorporated  city-specific  temperatures  and  RVPs,
while  the refueling  analyses  did not.

     In the RVP analyses, two different  types  of  city-specific
temperatures  were  used   for  the  different  analyses performed.
Environmental  impacts  were modeled  using  temperatures  from the
design value day of the  area.  (The design  value is defined to
be the  fourth  highest   one-hour   ambient  ozone  concentration
occuring  in a  three  year period.)   Inventory projections based
on the design  value day  temperatures were used  to compare and
rank various control programs.

     The  economic  impact of  RVP  control was  determined using
July  average   temperatures   rather  than   design  value  day

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                             3-7
 nperatures.   EPA   used  this  average  temperature  approach
 ::ause   the  economic   benefits  of   recovering  evaporative
 issions  occur  throughout the  summer,  not just  on high ozone
 /s.   In  particular,  the average temperatures during the month
  July were used because they  correspond  to the  in-use  fuel
 latility  survey data used  in  this  study.   As with the design
 lue  day  temperatures,  July average temperatures  were  used  to
 Iculate   emission   inventories  and  emission  reductions   in
 ojection   years   under  various   control   options.    These
 ventories  wore  then used  to estimate economic credits  (i.e.,
 a evaporative  recovery credit  and the  attainment  area  VOC
 ntrol  credit).

   City-specific  alcohol-blend market  shares were  also  used
  the  modeling  in  order  to  obtain  more  accurate  emission
 ctors  by accounting for the fraction  of alcohol  blend  fuel  in
 e market.   EPA  estimated that alcohol blends have  a  1.0 psi
 gher RVP than  the  base gasoline.  The  market share data was
 so   used   to  evaluate  the  impact  of  various  alternative
 eatments  of alcohol blends.   In  the modeling, it was  assumed
 .at   the  RVP of gasohol  was  1.2  psi  greater  than  that  of
 soline  (i.e.,  1.0  psi RVP  effect  with  a 0.2  psi  average
 mmingling effect).   In  those  scenarios where  alcohol  blends
 re   required to meet  the  same RVP restrictions  as gasoline,
 .e in-use  RVP  of  alcohol  blends was  assumed to be  0.2 psi
 eater  than gasoline, due solely to  commingling.

    In  addition to city-specific   temperatures   and'  alcohol
 .end   market  shares,   city-specific   in-use  fuel volatility
 irvey data were used  in the  RVP  modeling.  The  1983 RVP  data
 'presented  average  volatilities   for   non-alcohol-containing
 ileaded gasolines  in the summer months.  These RVP levels  were
 ;ed  to  develop the 1983  base  year  inventories.   The  1985
 irvey data were used  in all  the  projection years.  For  these
 )85 values,  if the  area surveyed had an RVP  less  than the  ASTM
 Lmit  for  that area,  the ASTM  limit was used  in place of the
 irveyed RVP level.   This was done  based on the assumption  that
 ae RVP in the area  would continue to  rise  until  it reached the
 3TM  limit.    If no RVP  data  was  available   for  a  given
 jn-attainment  area,  the RVP  of  the nearest  survey  area  was
 sed.   Also, the most appropriate  RVP value  would be that for
 ie month  during which  the  design  value day occurred.   Since
 \e surveys were performed  only in  July,  if  the  design  value
 ly was  not  in  July,  the  RVP  was  adjusted  to   represent  the
 orrect  ASTM class  for the  month of  the design value day.

    The above city-specific  input were  incorporated  into  the
3BILE3.9  model  which  then  calculated  HC emission factors for
 ach  of  the urban,  non-California  ozone  non-attainment  areas
odeled.   These  non-attainment  area emission  factors were  then
onverted    into  nationwide  emission   factors   based   on   a
opulation-weighted    average   of    the   individual    emission
actors.     FLeetwide    exhaust,   evaporative,   and   refueling

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                              3-8
emission  factors  were  calculated   for   each  gasoline-fueled
vehicle category  (LDV,  LDT, HDV) .   The HC  emission  facto.rs for
gasoline-fueled vehicles  in the  RVP  analyses were  calculated
assuming both that onboard  refueling  emission controls would be
in  effect  as  of  the 1990  model  year   and   also  assuming  no
onboard controls.

     In  estimating   refueling  emissions,   because   all   the
necessary  city-specific  inputs  were  not  available,  MOBILES.9
was used to develop  nationwide emission factors directly, using
national   average   inputs   such   as   fuel   volatility   and
temperatures.   The analysis also  accounted for  tampering  with
the  evaporative  emission control  systems,  which may  occur  in
use.   The  types  of  tampering  identified as  those  which could
affect  onboard   refueling   controls  were•  disconnection   and
removal  of the  evaporative emissions storage canister.   This
was assumed to occur at rates equal to those  of current control
systems.    As   in   the   RVP   analysis,  fleetwide   exhaust,
evaporative,  and  refueling  hydrocarbon  emission factors  were
calculated  for   each gasoline-fueled vehicle  category.    It
should  be  noted,  however,   that  these were calculated assuming
no RVP control.

     Using   the   calculated   nationwide   emission   factors,
inventory   projections    of   future    VOC    emissions   were
estimated.       Non-California,   urban,   non-attainment   area
inventories  were  calculated  for  both   mobile   and  stationary
sources, both as  a whole and subdivided  into  several individual
source categories  using  assumptions  concerning growth rates and
future technological  improvements.

     These projections were used to  generate  projected emission
reductions   associated  with   each   control  strategy.    The
nationwide   emission   reductions    were   used   in   ranking
control-effectiveness and cost-effectiveness  of the RVP control
programs.   The  non-attainment  area   inventories  were  used  as
input for the ozone air quality  modeling  and  for  estimating the
cost effectiveness of RVP controls.

     Nationwide  inventory  projections for  the  calculation  of
economic  recovery  credits  for RVP   control  were  made  using
emission  factors  based  on  July  average  temperatures  for the
non-attainment areas.   For the  ozone air  quality  modeling for
RVP  control,  the  analysis  used emission  factors based on the
design  value  day  conditions.   The design value day  was used  as
the  basis   for  the  emission projection  since the  ozone model
focuses on that  day.   For all the RVP projections  made, a base
year  of 1983  was  used with  projection years  of  1988,  1990,
1992,  1995, 1997,  2000, 2010.

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                              3-9
     B.     Summary and Analysis of Comments

     Some  comments  were  received  on  the  type of  temperature
data used  in the  modeling.    MVMA  commented that  there  is  no
clear relationship  between  the design value level  and  the July
average temperatures used.   MVMA  feels that better  correlation
with temperature could be obtained  with an ozone statistic more
robust than the design value.   When MVMA repeated  the  analysis
to  calculate  inventory projections,  it used  July minimum  and
maximum temperature data whereas  EPA used  the design value  day
minimum and  maximum temperature data  for  each city.   It  noted
that in some cities this resulted in higher  temperatures,  while
in others it resulted in lower temperatures.

     MVMA  is   correct   in  noting  that  there   is   no  clear
relationship   between    design   value   and   July    average
temperatures.  However,  this  is not surprising  since  there are
many other  city-specific  factors that  impact  the magnitude  of
the design value,  such  as  VOC emissions and VOC:NOx ratios.  In
regard  to  the  minimum  and  maximum temperatures  used in  the
modeling,  MVMA  presented no  arguments that their  approach was
more appropriate,  but did note that  the difference was variable
from city  to  city.   Lacking  other information, the design value
day  temperatures  actually  occured  and  produced  high  ozone
levels.   The  July-average  temperatures  have  a  much  weaker
connection  with  ozone  levels   and  the   effect   of   emission
controls on  ozone  levels.   Thus,  there is no  reason for EPA to
alter its use of temperatures  in its air quality modeling.

     MVMA  commented  that  the   growth rates   used  were  not
city-specific,  yet should have been,  since much of  the  other
air  quality projection  data  used  was city-specific.    It also
suggested  that  growth rates  should also be city-specific since
they  vary  widely  from  city  to city.   J.G.  Bathe  stated that
EPA's  growth rates  are  too  high,  and  lead to  overestimated
emissions.

     EPA is,  in  fact,  currently working  to develop  improved
growth  rate assumptions.  This work  includes  consideration of
city-specific aspects.   Unfortunately though,  this  work  is  as
yet  incomplete, and  thus  not available  for  this  rulemaking.
Also,  none of  the commenters presented  any  information from
which  growth  rates  for  each  city  could be  developed,  nor
demonstrated  that  updated  rates  would  be  different.   Even
without  any  future growth,  due to  the magnitude of the current
ozone  problem,   the  conclusions  drawn from  the  air  quality
analysis would  not  be  substantively  altered.   Thus,   for this
analysis of near-term RVP control,  EPA will  use the same  growth
rates as were used  in the NPRM analyses.

     The choice of 1983  as  the base  year  for the analysis was
thought by some to introduce  significant error  in the results.
Sun  Oil  stated that  the  summer of  1983 was unusually warm and

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                              3-10
had  an  unusually  large  number of  ozone exceedances.   It  felt
the  EPA  must  develop statistical  attainment  data using  normal
temperature information  determined over  an extended  period  of
time  (15-30 years).   MVMA also commented  that EPA  selected  an
unrepresentative base  year design  level on  which to  base  the
air quality calculations.

     While it is true that 1983 was among the  warmest in recent
years, this was  not  the reason EPA chose it.   Actually,  at  the
time  the   DRIA  analysis  was   performed,   the  most   recent
three-year  period  of  design  values  was  1982-1984,  with  1983
being the middle,  or  base year.   Also,  it  is not obvious  that
the  high temperatures of 1983  would make it inappropriate for a
base   year.    Furthermore,   recent   preliminary  ozone  'data
indicates  that  the summer  of  1988 was  even  warmer   and  had  an
even more severe ozone problem.

     MVMA objected to some  of  the adjustments made to  the  NEDS
inventory   for   the   base  year   1983.    It   feels   that   the
adjustments  tended   to  decrease  the   contribution   of   all
stationary  sources  to   total  NMHC   emissions,   and  thus  to
increase the  apparent importance of  motor  vehicles.   It  feels
that  this  could not  be  validated with the  current knowledge of
emissions of stationary  sources.   MVMA also disagreed with  the
resulting trends in the  inventory.

     While  it  may be  true- that  improvements could  be  made  to
the   estimation   of    stationary    source   emissions,   such
improvements would not   substantively  change  the  conclusions  of
this  analysis.   The  acceptability of  these regulations  will  be
judged  based on the  cost effectiveness  of  the reduction  of
mobile source emissions,  and  thus the estimation of stationary
sources is not significant.

      In  the reanalysis  which  MVMA  had  done,  they  used  more
city-specific  data than EPA,  which   they  say  is  preferable.
Whereas  EPA used  a  1983  implementation date  for  I/M programs
for  all  cities,  MVMA used city-specific  implementation dates.
MVMA also  accounted  for  Stage  II  controls  being  implemented in
New  York,   New  Jersey  and St.  Louis,  and used city-specific
model year start dates and vehicle classes.

      In  past analyses,  EPA  has  noted  that  its modeling  was
performed on a  nationwide basis,  and  that  as such,   it  was  not
appropriate  to  predict  the  exact  impact  of  rules on  each
particular  area.  Nevertheless,  this  approach  was  sufficient
given  the   nature  of   EPA's  past   mobile  source  controls.
However,  control of  in-use RVP  required  a  more city-specific
approach  than  used  previously.    For  this  program,  it  was
essential that EPA's model be  able  to account for city-specific
RVPs and temperatures.   Other  inputs, such as for I/M programs,
are  not  considered on a city-specific basis  because the models
are  not  capable  of  handling  them at the  present  time.   This

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                              3-11


approach  is  expected to  be  sufficiently  accurate  given  the
neiture of  the Agency's modeling  goal:   to provide an  estimate
of the  impact of control  on a nationwide basis.   In regard to
MVMA's Stage  II  comment,   it applies primarily  to the  onboard
refueling analysis and not the RVP analysis.

     Some  commenters  questioned  the number  of  non-attainment
areas that  should be  included in the analysis.  MBS  feels  that
only those  areas expected  to be in non-attainment in the future
should be included.   OMB went further to say  that  the effect of
compliance due to volatility controls should also be considered.

     It   has   been   Agency   policy  to   include   all   current
non-attainment  areas  in  air   quality  analyses.    To  ensure
consistency  it  is necessary to continue  this practice.   Also,-
analyses based on future years would be very  dependent  upon the
year   selected,   which   could   lead   to   significant   policy
problems.   However,  the  number  of  non-attainment  areas  is
expected  to be very  similar in either  case  without  additional
controls.   Thus  any change in this policy would not  affect the
conclusions drawn here.

     MBS  also noted that  their analysis used a 30-year model of
the fleet,  instead of a 20-year model .like EPA used.   They feel
that  this  is  appropriate  because  vehicles  more  than  20 years
old   contribute   significantly   to  total   fuel   consumption.
Chrysler  stated  that MVMA statistics   show that  fleet turnover
is slower  than that  used in the NPRM (e.g.,  it  takes 15 years,
not 13 years, for 90  percent of cars and trucks to be replaced).

     While  it  is  true that a 30-year model is likely to be more
accurate  than a  20-year  model,  the   difference  would  not  be
expected  to  be  substantial.   EPA's   model   accounts  for  all
model-years more than 19 years  old on an aggregate basis.  This
is  reasonable since  such vehicles account  for   less  than one
percent  of vehicle-miles travelled  (VMT).  Since  Chrysler did
not  include information about  the model years  involved  in the
MVMA  study showing  90 percent of  vehicles being  replaced after
15  years,  it  is not  possible to  resolve the  difference  from
EPA's  estimate.    It  is   likely  that  MVMA  estimate  involved
different   model  year  than EPA's,  which  could  explain  the
difference  since vehicle sales  vary from year  to year  due to
economic  influences.

     C.     Final Analysis

     For  the  1989   through   1991  timeframe,  EPA  will   require
gasoline  sold during the  summer months to  have  its volatility
reduced  below the maximum ASTM limits  to  10.5 psi  (primarily in
Cliiss  C  areas),  9.5 (primarily  in Class  B areas),  and  9.0
(primarily in  Class  A  areas,  no  reduction).    (The  specific
standards   for  each  area are  outlined  in  Chapter  1.)   The

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                              3-12


analysis focuses on  1990 which is representative of  the  entire
1989-1991 control period.

     The analysis  of comments presented in  Chapter  2 indicates
that  EPA's  DRIA  emission  factor  models  are  still  the  most
appropriate to use.  EPA  is  continuing its development of these
models and improvements will be forthcoming  with  the release of
MOBILE4  later  in  1989.   However,  the  modifications envisioned
lead  to  an increase in  the  emissions  effect  of   RVP.   Thus,
continued use of the DRIA would be very conservative.  As shown
in Chapter 5,  use of the DRIA  estimates still  results in  a very
cost  effective  interim program.   Thus,   for  simplicity,  the
emission  inventories found  in Chapter 3  of  the DRIA for  the
case  without  prior onboard  implementation will be used here to
estimate  the  emission  reductions  resulting  from  volatility
control.  Unlike in  the DRIA,  however, estimates are being made
on  an ASTM  class-specific  basis.    As a   result,  ASTM  class
specific  emission  reductions  were  derived by  assuming  that
control  to  9.5 in Class  B was equivalent  to  10.9  in  Class C,
and 9.0  in  Class A equivalent to 11.5 in Class C.   In addition,
uncontrolled  fuel  is  no  longer  considered  to  have an  RVP of
11.7  psi,  but  rather  to  be  11.3  psi in Class  C  areas,   10.0
(11.5  equivalent)  in Class  B  areas,  and 8.6  (11.0  equivalent)
in  Class A areas  (as  determined  in  Chapter  4).   This  change
caused emission reductions  to decrease substantially below the
DRIA  estimates, and  in fact caused emission reductions in-Class
A areas to disappear entirely.

     One additional change from the methodology  of  the DRIA was
the value  used for  1990 nationwide VMT.   Comments  discussed in
Chapter  4  stated  that by  using  the  MOBILES  fuel  consumption
estimates  EPA  had  significantly  underestimated the  refining
costs.  As  a  result, in Chapter 4, new refining  cost estimates
are based on  DOE  fuel consumption estimates.[1]   In  order to
remain  consistent  with this  change,   1990  nationwide  VMT  also
had  to  be changed  to  reflect  the  DOE  estimates.   This  was
incorporated  merely  by   multiplying  the  emission  reduction
estimates  from the DRIA by  the ratio  of  1990  nationwide  VMT as
estimated by DOE (approximately 2068.57 billion  miles), to  that
as used in the NPRM  (1760.81 billion miles).

      In order  to determine the emission reductions  in each  ASTM
class  individually,  the emission reductions were multiplied by
the fraction  of  VMT  (assumed  to be the same as  the fraction of
fuel  sales) which occurs in  each ASTM  region (4.02%  in Class A,
34.19%  in  Class B,  and 61.79% in  Class  C) .  The resulting VOC
emission reductions  are shown  in Table 3-1.

     As  described  in  Chapter 2,  these figures  represent  very
conservative  estimates given  more recent  knowledge concerning
running  losses and  excess  evaporative emissions.   To  show the
potential  for  greater control,  to  these  emission reductions
were  added "a  recent  estimate  of excess evaporative  and  running

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                              3-13
                           Table 3-1

           Nationwide Year Round Emission Reductions
              for the Interim RVP Control Program
Design Value Day (1000 ton/yr)
Class A
Class B
Class C
Nationwide
  DRIA
Estimate

    0.0
  208.46
  465.30
 • 673.76
  Preliminary
 Running Loss and
Excess Evaporative
	Emissions

        0.0
      413.18
      887.62
     1300.80
  Preliminary
    Total
(for Sensitivity
    Purposes)

       0.0
     621.64
    1352.92
    1974.56
July Average (1000 ton/yr)
Class A
Class B
Class C
Nationwide
  DRIA
Estimate

      0.0
    158.25
    360.05
    518.30
  Preliminary
 Running Loss and
Excess Evaporative
	Emissions

          0.0
        313.67
        686.83
       1000.50
  Preliminary
    Total
(for Sensitivity
    Purposes)

    0.0
  471.92
 1046.88
 1518.80
Note:   Control   period   emission   reduction   estimates   are
        estimated  to  be 42.56 percent  of year-round reductions
        based on the fraction of fuel sold during that period.

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                              3-14
loss emission reductions.[2]  Running  loss  emission  factors for
the  interim  RVP control  program were  estimated by  fitting  a
curve through  the three  data points  of running loss  emission
factors  as  a function  of  fuel  RVP,   while  excess  evaporative
emission  factors  were  derived  for  the  scenarios  required  by
adjusting the  estimates  at  9  psi  RVP  by  the  ratio  of   ,ie
uncontrolled diurnal index  (UDI)  at  the RVP required to that at
9  psi.[2]   The difference  between the  base  case  and  control
case emission factors was then  multiplied by the nationwide "»/MT
estimate for the individual  ASTM classes  to  determine  the tctal
excess evaporative  and  running loss emission  reductions.   (The
nationwide  VMT   was   estimated  from   the   most  recent   DOE
information, and  then broken  into  ASTM  classes  by  multiplying
by the fraction of  VMT  occurring in each ASTM  class  area.Cl])
July  average  excess  evaporative  and  running  loss  emission
reductions  were then  determined  by using  the  ratio  of  July
average to  design value  day emission reductions found  in the
DRIA.  The resulting emission reductions are shown in Table 3-1.

III. Ozone Modelling

     A.     Butane and Oxygenate Reactivity

     1.     Synopsis of the NPRM Analysis

     The photochemical reactivity of butane  and some oxygenates
(i.e.,  ethanol   and  methanol)   was  discussed  in  the  NPRM.
However, the previously established  Agency policy was  to treat
all  reactive compounds equally.   While the rationale  for this
position  was not  discussed in  detail  in  the  NPRM,   it  would
still be  useful at this  point to review some of the reasons why
EPA  has  chosen  in  the  past  not  to  consider  differential
photochemical reactivity  in its  control programs.  First, there
is  the  issue of  multi-day  pollution  episodes,  of  which there
are  two types:  one where the pollution  remains in one area for
a  prolonged  period due to  stagnation,  and the  other  where the
pollution   is   transported   to   another   area   without  being
substantially diluted.  With  both types of multi-day pollution,
the  rate at which  a particular  species  reacts becomes   less
important since it has  a  longer time  to  react.   For  example,   a
slowly  reacting compound  may not  react  completely  in  a single
city,  but  could   be transported to  another  where   it  would
continue  to  react.   Consequently,  rate data showing that attack
by  OH  radical  occurs  slowly,  or  even  single-day  modeling
studies  showing   a  compound  to  be   less  reactive,  are  not
sufficient  to  quantify  the  effect  of  a  particular  compound
during a multiday  episode.

     Second,  it has been shown  that the  absolute  and relative
reactivity of compounds can be affected  by changes  in HC to NOx
ratios.   Specifically,  differences  in  reactivities  are  smaller
at low  HC to  NOx ratios. [3]  This  is important because  it  is

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                              3-15
expected that  the  current aggressive  HC  control strategy  will
result  in  lower  HC to NOx ratios, and  thus  smaller  differences
in reactivity.

     Third,  in  many  respects  the  modeling  capabilities  and
chemical data  available  are  too  limited to  completely  address
this  issue.   The  available  models  are  only  approximations  of
what happens in  a  real airshed, and thus the  results  cannot  be
considered  to  exactly  describe  the  actual   effect   of  any
particular compound.   Photochemical  modeling  requires  a  great
deal  of meteorolgical data  to  account  for  things   such  as
transport  and  dispersion.   Often these data  are not completely
available,   and  assumptions  are  necessary.    Other   modeling
simplifications  are  generally included to  reduce computational
time  (and  thus costs).   With  respect  to chemical  data,  it  is
noted  that for  complicated  molecules there  can be  too  many
reaction pathways  to model completely.   Even for a relatively
simple  molecule  like  methanol,  there has  been some  question
about its reaction mechanisms.[4]  This situation can  result  in
the  exclusion of   several  mechanisms  that  are deemed  to  be
insignificant.    Thus predicting  the reactivity  of  a  molecule
requires simplifying assumptions,  which  all  add some  degree of
uncertainty to any attempted analysis.

     Finally,  attempts  to regulate while  considering reactivity.
can  easily result  in  unworkable  regulations.   As noted before,
future  changes, in  HC to NOx ratios  could change the real-world
reactivity of  a  compound,  which combines with the potential for
changes  in modeling  technology to  make  any  analyses  done  at
this  point continually subject to change.   Also, regulating on
the  basis  of  reactivity  could  require careful  monitoring and
controlling  of the  chemical  composition of  fuels.   This would
bo  much  more   difficult  than  controlling  a  fairly  simple
physical parameter such  as RVP.  Moreover,  since fuels  tend to
contain  a  large  number   of  components,  the  volume   of  data
necessary  to  accurately predict the reactivity of  some  type of
emission    (e.g.    evaporative   emissions)     could    become
overwhelming.  While concerns  about the  ease of regulating are
not  adequate  justification  for  not  considering photochemical
reactivities,  they do need to  be  weighed against the potential
for  benefits  from such  consideration.   A  summary   of the NPRM
discussions  of  butane and  alcohol  are summarized separately
below.

      In  the  NPRM,  the photochemical  reactivity of butane was
classified using a  1984  EPA  report.[5]  This report classifies
compounds   as   "unreactive,"   "borderline,"    or   "reactive;"
reactive  compounds  being those  which  are  significantly more
reactive than  ethane  (based on  smog  chamber and/or   rate data.)
Using   this  system  butane  was  classified   as  reactive.   In
support of this  conclusion, it  was noted  that butane would also
be  classified  as reactive using the GM scale  that was developed
in  the  mid-1960s.[6]   The analysis went further  to say:

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                              3-16
     Modeling  and  smog  chamber  data   also   verify  the
     contribution  of  butane  to  ozone  formation  in  the
     troposphere.   Based  on available  information,   it  is
     EPA's  position  that   butane   is   a  photochemically
     reactive compound  which  contributes  to ground  level
     ozone  formation.    Therefore,   reductions   in  butane
     emissions through  in-use  fuel  volatility  control  are
     expected to  lead  to subsequent  reductions in ambient
     ozone levels.

Thus, no numerical consideration  of  the specific  reactivity of
butane relative to average VOC was attempted by  EPA.

     The  photochemical  reactivities  of  ethanol  and  methanol
were  discussed  briefly  in  the  NPRM;   no  other  oxygenates,
however,  were   discussed.     The   only  oxygenate   which  EPA
considered  in  its  air  quality  analyses  was  ethanol.    For
calculational purposes,  ethanol was  assumed to be  as  reactive
as average  VOC  on a  per carbon  atom basis, which  meant that
ethanol was assumed  to  be only 62 percent as reactive on a mass
basis.  This  difference  is  because  ethanol molecules  contain
oxygen atoms, and  thus  ethanol has  a much higher mass to carbon
atom ratio than most VOC.  This approach was chosen  since  it is
the  oxidation  of  carbon that  contributes  to ozone formation in
the  troposphere.   It  was  also  noted that  the  rate at  which
ethanol reacts  with  OH  radical  in  the atmosphere  (the  primary
mechanism   for   oxidizing  VOC)  is   on   the   same  order   as
hydrocarbons such as butane or toluene.

     The NPRM  discussion also noted  that  studies  had indicated
that  methanol  is   less  reactive   than   typical  hydrocarbon
vapors.   The  studies  showed the reactivity of methanol  to be
only  2-43  percent  as  reactive  as  average VOC  on a  carbon
basis.  These numbers  were used to estimate  the  air  quality
impacts of methanol blends.

     The   increase  in   emissions   of   formaldehyde   due   to
combustion  of  methanol blends was  also  discussed.   Due to  the
very  high reactivity  of formaldehyde,  which  offsets   the  low
reactivity  of  methanol, the  reactivity  of exhaust emissions
from  methanol  blends   was   assumed   to  be  the  same  as  from
gasoline.

     2.    Summary and Analysis of Comments

     The Agency  received many comments (from Sohio,  the Ad Hoc
Ethanol Committee,  OFA,  the  Ohio   Farm   Bureau,  NESCAUM,  Sun
Refining Co.  and  GM)  which suggested that EPA  ought  to consider
the  photochemical  reactivity of  evaporative emissions  in this
rule.   Most of  the  comments  were  with  regard to  butane  (and
other   light   paraffins)  and/or   oxygenated   compounds.    The
commenters  stated that  these  compounds  are less  reactive than

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                              3-17
average VOC.   This  conclusion was based  on rate constants  for
reaction with OH radical,  the results  of  smog chamber  studies,
and the results of  single-day computer modeling  studies.   Since
light paraffins (and oxygenated compounds  for  oxygenate blends)
make up  a  large part  of  evaporative  emissions,   the  commenters
felt that  controlling  such emissions  will  not be  as  effective
in reducing ambient ozone as EPA has  suggested.

     Sohio  stated   that  EPA  should  not  rely on smog  chamber
studies  to  determine  the  reactivity  of  butane   since  smog
chambers are not representative of real world conditions.

     One of the modeling  studies  submitted, which was performed
by Systems Applications  Inc.  (SAI),  looked at various  control
strategies involving  ethanol  blends.  The  model  predicted that
even if ethanol blends  had higher RVPs than  straight  gasoline,
they  would  still   result   in less  ozone  production   for  many
cities.  The report explained that this was due  to  the combined
effect of  ethanol's reactivity and  its  effect on  CO  emissions
(which contribute to ozone  formation).  The report  went further
to  say that  there  are two key aspects of  ethanol's  chemistry
that make  it  less  reactive.   First,  it  noted that  the initial
reaction of  ethanol with  hydroxyl radicals generates  only half
as   much   ozone    as   the   initial   reactions   of   typical
hydrocarbons.   Second,    it   stated  that   acetaldehyde,   the
principle  intermediate product,  is not highly reactive and can
inhibit   ozone  formation   by  reacting   with   NOx   to  form
peroxyacetylnitrate (PAN).

     Similarly, the report  stated reasons  why the reactivity of
butane is  low.   It  noted the  low rate constant for the reaction
of OH radical with butane,  which  is  much  lower than the average
value  used  for  VOC  in EKMA.   It  also   stated  that  the main
products of the reaction of OH with  butane are acetaldehyde and
methylethyl  ketone,  and that  these  products  are "not much more
important  in further ozone  formation than is butane itself."

     Some  of  the comments  did address the points  noted above,
regarding  EPA's   rationale  for   not  considering  reactivity.
NESCAUM   noted   that   there   is   generally   an   incomplete
understanding  of  the  photochemical  formation  of  ozone.   Sun
noted  that HC to NOx  ratios  can have a  significant  effect  on
reactivities,  and  thus that  for  some areas  HC  control without
NOx control  will  not result  in  attainment.   It  added  that the
mechanisms  of  transport and  dispersal are not well understood.
It  also  noted that  because there are processes  which scavenge
ozone  in  the  atmosphere,  compounds  that  produce  ozone more
slowly do  not  allow concentrations of ozone  to  reach  levels as
high  as  others might.   They  went further  to  say that this slow
reaction  rate would  also  allow  the  compound  to  be   dispersed
before it  could produce large amounts  of ozone in an urban area.

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                              3-18


     Much of  the evidence  presented to  show  that  butane  and
many  oxygenated  compounds  react  slowly  in  the  atmosphere  was
smog  chamber  data  and"  rate  constants   for  reaction  with  OH
radical.   This   information,  while  valid,  is  insufficient  to
allow  a  quantified  estimate  of  the  reactivities  of  these
compounds  in  real  situations.   The qualitative  discussions  in
the  SAI  report  are interesting;  however,  some  of  the  points
raised   are  misleading.    First,   the   report  claims   that
acetaldehyde  is  not  highly  reactive;  however,  at  least  one
modeling study has  shown acetaldehyde to  be  more reactive than
formaldehyde,   which  is   accepted   as   a   highly   reactive
compound.[4]   Moreover,   the  report  notes  that  acetaldehyde
scavenges NOx by reacting  with it to  form PAN.  This  would  in
fact  be -of  some  benefit  with respect to ozone levels,  but there
are  also negative  aspects  of PAN  formation:   PAN itself  is  an
air  pollutant  which causes  significant  health effects,  and  it
can be transported  long distances before  it  decomposes  and thus
regenerates the  NOX.   EPA  regulates  ambient ozone  levels  as a
surrogate for  all  oxidants,  assuming  'that  satisfactory levels
of  ozone will result  in  satisfactory  levels  of  all  oxidants.
Substitution  of  PAN  for  ozone would  clearly  be unacceptable.
Another misleading  aspect  is  the  comparison of rate constant of
the  reaction  of OH  with  butane  to  the  rate  constants  for
reactions  with  the  theoretical   species  of  the  Carbon  Bond
Mechanism  (CBM)  which is  used  in EKMA.   This  is  not  really
appropriate since  the butane  rate  constant  represents  only the
initial  reaction   with  OH,   while  the  CBM   r.ate  constants
represents  an  average of the reactions of all  the carbon atoms
initially  present  as  paraffins.   Thus the  CBM  rate  constants
also  account  for  the  products of  the initial  reaction,  while
the butane rate  constant does not.

      The  corresponding  photochemical  modeling  study   is  more
useful, yet it still does  not resolve the concerns noted above,
especially  the  concern   regarding  multi-day pollution.   Thus
none  of  the  comments  are  sufficient   to  justify  reversing
established Agency  policy.  Also,  it should  be  noted that Sohio
was  incorrect in stating  that EPA relies  solely on smog chamber
studies when considering reactivity.

      EPA  does   not  deny   that  butane   and  many  oxygenated
additives  react   more  slowly  than average  VOC,  or that  such
slowly  reacting  compounds  can result  in  somewhat less  ozone
than  other  compounds.  Rather it  holds that  at this time, it is
not  possible  to  accurately address reactivity  issues  such that
consideration would be workable and appropriate.

      This   precedent  was  reaffirmed  just   recently  in  the
rulemaking  that  established  standards   for   methanol-fueled
vehicles.   That  rule  regulated organic  emissions on  a carbon
basis,  and did  not give  any allowance  for lower  reactivity,
even  though there is some evidence that methanol has a very  low
photochemical reactivity.

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                           3-19
  The  SAI  report submitted by  the Ad Hoc Ethanol Committee,
 le  it  does  not  resolve the  concerns  noted  above,  does
 jest that  the potential reduction of CO  from vehicles fueled
 a ethanol  blends could also impact ozone levels.   Since the
 nistry   of   CO   is   fairly  simple   and  well  understood,
 itifying  the  impact  of  CO  reduction does  not  involve the
 3  degree  of  uncertainty  as   when  dealing  with  reactivity
 afits  of  other  compounds.   For  this  reason, the  Agency  is
 .1  to  considering the  effect  of CO  on ozone  levels,  when
 ling   with   alcohol   blends.     Unfortunately   though,   the
 ormation  cxirrently available  is  not  sufficient to quantify
 effect, especially considering the  fact that the effect can
 7 greatly.

  B.    Air  Quality Projections

  1.    Synopsis of the NPRMs

  The  ozone  air  quality analysis,  which  predicted future
 ne  concentrations,  was done using the  EKMA computer models.
 NMOC  emission  inventories were  used  as  input to predict the
 ure   concentrations  for  the   non-California  urban   ozone
 -attainment   areas.   The model  is  primarily  a  nationwide
 el.   City-specific information was  only used  as  input for
 base  year ozone concentration and  for  the  ratios of NMOC  to
 :.  Meteorological conditions for  the EKMA model are based  on
 a  from one  of three  cities:   a) Los Angeles - for modeling
 ifornia   coastal  cities   (therefore,   not   used   in   this
 .lysis),   b)  Denver   -  for  modeling   cities  in  Arizona,
 or ado, Nevada, New Mexico, and Utah,  and c) St. Louis  - for
 .eling  all  other  areas.

  2.    Summary  and Analysis of Comments

  Both MVMA  and  GM  commented on  what  they believe   is  an
?rly simplistic  methodology  used in EKMA.   MVMA stated  that
?ir  analysis  showed that  even  if the ozone design  level for
3 areas varied  little,  the per  capita data, as well  as the
;al  NMHC  inventory emissions,  could be  very different.   It
;o  stated  that EPA's EKMA calculations  may show too large  of
 change  in  ozone  design  levels  even for  relatively  small
iuctions  in  NMHC emissions (as with  the proposed volatility
 itrol  progreim).   Since EKMA is  actually a  nationwide model,
 feels  that the air quality projections for  individual cities
:e  oversimplified.  It  did, however,  request that EPA  present
? results  of  each city  separately.   It commented  that  by
ing    such   a   simplistic  modeling   approach,    EPA   has
necessarily introduced  considerable  uncertainty  into the air
ality   predictions.    MVMA  felt   that   by  using  nationwide
arages  in the model, EKMA projections  should only be used  in
 relative,  not an  absolute sense.   It stated  that  the  EKMA
del   was   developed  in   order   to   quantify  the   current
derstanding of ozone  chemistry.  No model on  ozone  formation

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                              3-20


has yet  been universally  accepted.   Therefore,  it  argued,  the
EKMA model should only  be  used as guide  to the development  of
control strategies in a relative and not an absolute way.

     The  fact  that the design values  for two  areas coulc  be
similar  while  NMHC  emissions   are   very  different   is    lot
surprising.  Ozone  is  a complex pollutant, and  is  dependen  on
many other variables  such  as NOx  emissions.   In regard  to the
comments  challenging  the  accuracy of  EKMA,   it  is  noted  :hat
this approach  has been defended  at  length elsewhere  and these
arguments   will   not   be   repeated   here.    Concerning   the
appropriate role of the model, it is agreed that because  of the
simplified nature of this  approach,  it should not  be used in an
absolute,  or city-specific,  sense.    Rather,  its   role  is  to
translate  VOC  reductions  into  ozone  impacts  using  the  limited
available  data.   As was noted,  no model  has been  universally
accepted  yet.   However, it has  been  recognized that  EKMA  is a
reasonably accurate method of relating VOC emissions to ozone
impacts.   Thus  both the use  of  EKMA and  the role  it plays  in
EPA analyses are appropriate at this time.
 
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                              3-21


                     References (Chapter 3)


     1.     "The   Motor   Fuel   Consumption   Model   Thirteenth
Periodical  Report,"  Prepared  for  U.S.  DOE   by  Energy  and
Environmental Analysis, Inc., DOE/OR/21400-H5,  January,  1988

     2.     "Effect  of  Running Losses  and  Excess  Evaporative
Emissions on Future  VOC Emission  Inventories,"  Memorandum from
Richard     A.      Rykowski,     Senior     Project     Manager,
EPA/OAR/OMS/MVEL/ECTD/SDSB, to The Record,  December 22,  1988.

     3.     Dodge, M.C., "Combined  Effects of Organic Reactivity
and  NMHC/NOx  Ratio  on  Photochemical  Oxidant  Formation  -  A
Modeling Study," Atmospheric Environment,  August 1984.

     4.     Ito,   K. ,   et.   al. ,   "Photochemical  Reaction  of
Alcohol-Fueled   Engine   Exhaust   Gases,"   7th   International
Symposium on Alcohol Fuels, 1986,  433-438.

     5.     Singh,   H.B.,    et.    al.,    "Reactivity/Volatility
Classification  of Selected  Organic  Chemicals:  Existing  Data,"
EPA-600/3-84-082, 1984.

     6.     Caplan,  J.D.,   "Smog  Chemistry  Points  the  Way  to
Rational  Vehicle Emission Control," SAE  Transactions,  Vol. 74,
1966.

     7.     "The  Effect  of  Vehicle  Running  Losses on  Future
Ozone  Non-Attainment,"  EPA Memorandum from  Don Clay,  Acting
Assistant Administrator for the Office  of Air  and Radiation, to
the Administrator, EPA, October 6, 1988.

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                           Chapter 4

                        Economic Impact


     The  societal  cost of  RVP control  is composed  of  several
elements,  all  of  which  will  be  presented  in  this  chapter.
:?irst,  refineries  incur  a  cost when  reducing the  RVP of  the
fuel.  Second,.increases  in  fuel  energy density  and  reductions
in   fuel   evaporative   emissions  result   in   savings   to  the
consumer.   Changes  in drivability  and  safety  also  have  an
economic  impact   on   society.   Finally,   enforcement   of  RVP
regulations  also  results  in a minor  cost to  society.   These
economic  considerations  are   the   subject  of  this  section.
Finally, the effect  of RVP  controls  on crude  oil  imports will
also be evaluated.

I.    Refining Costs

A.    Synopsis of NPRM

     Chapter 5 of  the  Draft  RIA accompanying the NPRM evaluated
the economic costs and credits  associated  with  the proposed RVP
regulations.  Modeling work  performed  by Bonner and Moore which
evaluated  the  cost of RVP  controls  at  1  and  2  psi  increments
was  used  in determine  refining cost.  Fuel survey data was used
to  determine  a  national  average  baseline RVP.   By  applying
Bonner  and Moore's  modeling results,  average  nationwide  costs
of  control  were  determined   for   a   number   of  RVP  control
scenarios.

B.   Summary and Analysis of Comments

     The  majority  of  comments  which  were   recieved  on  the
economic  impact  analysis presented  in the Draft  RIA pertained
to  the proposed 1992  regulations  of  7.0,  7.8,  and 9.0 psi RVP
fuel  in Class A, B,  and C areas,  respectively;  particularly the
cost  and feasibility  of  RVP  control  below 9  psi.   However,   a
significant  portion  of the comments  received dealt  with  issues
applicable  to  both the  interim and  1992  regulations,  and some
with the  interim regulations specifically.   Those comments will
be dealt with here.

      1.     Feasibility  of   and Leadtime   for  Interim  Control
/           Program

     There  was  widespread agreement  among  commenters, including
all  refiners,  that  the  proposed interim  control  program would
not  present  difficult  technological  problems  for the production
of  Class  C fuel.   Although some concern was  expressed  about
reductions  below 9 RVP in Class A  areas, no commenter expressed
concern  about specific  technological barriers  to the proposed

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                              4-2


program.   In evaluating  an  interim program based on Class A, B,
and C  RVP standards of  9.0,  9.5,   and  10.5,  respectively,  API
raised  no  concerns relating  to  feasibility  or   leadtime  and
stated that  this  level  of  control would  require  little  or no
capital  investment.   Most  refiners  either  agreed  with  API or
were  silent .on  the   issue  of  an  interim  program.   Chevron
specifically projected that the  required RVP reduction would be
made primarily  by reducing  the  amount of butane in  the blends,
and that no capital investment would be necessary.

     Conversely,  Texaco  commented  that  certain refiners would
be required  to  spend  capital  investment  funds  for  distillation
and butane disposal to comply with an interim 10.5 psi standard
in Class  C,  but  provided no  supporting  evidence,  and  did  not
identify  which  refiners the  comment  applied  to.   Given  the
current degree of discretionary  butane blending by  the refinery
industry  it  is unlikely that  this would  be the case.   Another
commenter, Sinclair Oil  Corporation,  stated that EPA's proposed
Phase  I  regulations would  require  investments of  $200,000 at
two Wyoming  refineries.  However,  as described in  Chapter 2,
many of  the Rocky Mountain and  Central  Plains states which the
Sinclair  refineries  service  have been  reclassified  to   less
stringent  levels  (the most stringent  standard has  been,  relaxed
from 8.2  to  9.5 RVP).   Thus,  for many of these states, meeting
control  levels  will actually require  no reduction  in  RVP  from
baseline levels.

     EPA continues  to  believe  that reductions in RVP to  9,  9.5
and  10.5  psi   in  Class  A,  B,   and  C areas,  respectively,  are
achievable for  all  refiners without  capital investment and  with
very  little  leadtime.  Such  interim  standards would  achieve
some RVP reduction  in  Class B and C areas  and would cap RVP in
Class  A  areas  at  current  levels.   A  recent letter to EPA  from
API stated that 45 days would  be  required  to begin production
of  controlled  fuel,   allowing  time  for  changes   in  refining
processes  and  changes in arrangements  regarding crude  oil  and
butane.   The  letter   lacked  specifics  as  to  why  these tasks
should generally  take  six weeks, and what  refiners  might do to
hasten these events.   While six weeks may  allow all refiners to
proceed  in a business-as-usual  fashion,  EPA expects  that  some
refiners  may have  to  modify their  standard practices relating
to purchasing and distribution.

     EPA believes  that providing 70 days  after  promulgation of
the standards  will  allow all  refiners to provide terminals  with
complying  fuel.   Some refiners  may elect  to  use  flexibilities
available  to them  to  minimize  the time  they require  to  make
purchasing changes  and to  get production going, and others may
take advantage of options  in the  distribution system to  reduce
the  refinery-to-terminal transportation  time.  Most   refiners,
we  believe,  will not  require  unusual   efforts  or  expense in
either  production or  distribution.   Finally,  as   discussed in
Chapter  1,  an  additional 30 days  after  compliance should allow
all end users to  come  into compliance as  well.

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                              4-3


     2.     Volume of Fuel Controlled

     Comments  were  recieved  on  EPA's  draft  analysis  stating
that  the  gasoline  demand  projected  using  the  MOBILE3  fuel
consumption model for future years was too  low.   EPA agrees and
has  based   this  analysis  of   refining   costs   on  DOE  fuel
consumption projections.[1]

     3.     Cost of Interim RVP Control

     Several  commenters  provided  refining  cost   estimates  for
interim  volatility controls  which differed  with the  analyses
performed by  Bonner and Moore  and EPA  in  several  areas.   One
such commenter,  API,  included in  their  comments  an  estimate of
compliance  costs for  the   same  interim  controls evaluated  in
this RIA.   API  estimated the cost of controlling  fuel RVP to 9,
9.5, and 10.5 in Class  A, B, and C  areas  to  be $540  million
annually,  significantly  higher  than the  costs  presented  in
section  III  of this chapter.   Since  the API  analysis included
all  of   the major  comments  received  on  interim RVP  control,
irather  than deal  with each  commenter  individually,  the major
areas of difference between API's and  EPA's analysis  will be
presented here.

     One  of the major areas  of  difference between  API's costs
and  those of  EPA  lies  in assumptions  regarding  the length of
the transition period neccessary  for  compliance  with summer RVP
regulations.   In their  comments,  API stated that low-RVP fuel
would have  to be produced  as  early as  mid-March, and further,
that   fuel   produced    in   early  spring   would   require    a
substantially  greater  RVP  reduction,  since  March,   April,  and
May  ASTM limits  are significantly higher  than  summer  levels.
API  increased   their  refining   costs   by  approximately  $150
million  to   reflect  this. =  As  discussed  in  Chapter   2,  EPA
believes  that  API  has  overestimated the length of the required
transition  period,   and  further  that the  current  lag  between
sales  and  production  already  necessitates  that  volatility
specifications  for  a  fuel  sold  in  one month  be met  by fuel
produced  during  the   preceding   month.    Consequently,  this
increase  in refining costs is unwarranted.   By eliminating this
adjustment,  API's  cost   estimate  would  be  reduced  to  $407
riillion.

     API  also increased their  estimated costs by $109  million
to  correct  for  improper  amortization  of  capital equipment by
Honner  and  Moore,  and to  reflect increased operating costs due
to  the  need  for  an  additional   month  for  transition   in  the
spring.   EPA  believes  that  Bonner  and  Moore  has  properly
amortized  capital  equipment costs  (which  apply to long-term
control   costs  and not  to  short-term  costs)  and  that  an
additional  month of transition time is  unwarranted.   When this
cost  adjustment  is  excluded,  API's estimated costs total $298
rail lion  per year.

     API  also commented  that an  R-value of  0.6  should  be used
in  assessing  fuel  economy  improvements.   Correspondingly,  API
increased  their  refining   cost  estimates  by $43  million  per

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                              4-4
year.   As  will  be  discussed  in  section  III  below,  EPA's
reanalysis  of  this  issue  concludes  that  an  R-value   of  0.85
should be used and that API has overestimated  refining  costs in
this respect as well.

     A further reason  why  the  refining costs presented  later in
this  chapter  are  lower   than  those  of  API  relates  to  the
baseline RVPs  assumed  in  the  analyses.   In the NPRM, an average
baseline RVP level of 11.7 psi (Class C  equivalent)  was  used in
determining  costs  as  well  as emission'reductions.   More recent
analysis of  survey data indicate  that  baseline RVP  levels  are
somewhat lower and  should  remain  so in the near future.   (These
are  shown  in  Table  2-1.)   As   shown   in  Table  3-1,   average
baseline  RVP  levels  in  Class  C  areas are  roughly 11.3  psi.
Baseline levels in Class B  areas are  approximately  10 psi (11.5
psi  Class C  equivalent),  while  baseline levels in Class A areas
are  approximately  8.6  psi  (11.0  psi Class  C  equivalent).   This
change  in  baseline RVP levels decreases calculated RVP control
costs  by roughly $60  million  per  year.   Adjusting   for  the
difference  in  R-value and  for  lower  baseline  RVP  levels would
reduce  API's costs to $195  million,  which  is  very close  to
EPA's  estimate of  $196 million  for  refining  costs less  fuel
economy savings (presented  later in this chapter).

     API also included approximately  $100 million  in their cost
estimates  for  compliance  verification, the  estimated  cost  of
testing  every  .shipment of  gasoline.   API  did  not  present data
in support  of  this estimate,  however, and EPA believes  it to be
rather  excessive.   Thus,  by subracting  compliance verification
costs, one  sees that  API's refining cost estimates are  actually
lower  than  EPA's.    This  is  due   to  the   fact   that  API
underestimated  control costs by  using Bonner  and  Moore's long
term control costs as a basis for  their  analysis.   EPA  beleives
that  the short-term,   "no-investment" costs  presented by Bonner
and Moore are more  representative  for  interim RVP controls,  and
has  used these costs  preferentially in the  analysis presented
below.

C.   Refinery Cost of RVP Control

     The   interim  control  of   summer  gasoline  volatility
currently  under  consideration  (volatility  limits  of 9.0,  9.5,
and  10.5 psi  in  Class A,  B,  and  C  areas,  respectively)  will
increase  the  cost  of  gasoline  production,  but   should  not
require  any  short  term capital  investment  (as discussed further
below).   The cost to  refiners will merely  be that of replacing
butane,  (a relatively  cheap, high-octane,  and high RVP  blending
component)  with other  gasoline  components  and with additional
processing,    to    meet    sales    volume    and   pool    octane
requirements.     The  cost  of  compliance  presented   in  this
chapter  should decrease in  future  years  as  refiners  install and

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                              4-5


employ facilities to convert butane into a low RVP,  high octane
olending component  (e.g.  MTBE,  ETBE,  etc.),  unless  the second
level of RVP control takes place first.

     The  refinery  cost  modeling  work  performed  for  EPA  by
Bonner and  Moore Management Science for this final  analysis is
improved in several  ways  over the modeling  done for  the NPRM.
(The  latest modeling results were placed  in  the docket shortly
after  the  NPRM  was  published.)  First,  it  was  possible  to
incorporate directly into  the  model  the  estimated  effect on
refineries of reducing the demand for gasoline under  a range of
volatility-control  scenarios.   (RVP  control  reduces  the amount
of  purchased  gasoline  which  is  lost  to   evaporation,  thus
reducing  the  volume of  gasoline  sold.)   Second,   the latest
modeling was able to estimate the impact of a drop  in the price
of butane on  refiners'  raw material  purchases and on the demand
for the natural gas  liquids  (NGL)  industry's  products.   A final
improvement was  to  extend  the  range  of  the original modeling
(which  evaluated RVP reductions of only  one and  two  psi) to
evaluate reductions  of  one,  two,  and  three psi.   (This latter
change has improved the accuracy of  EPA's  estimates  of  refinery
costs at lower levels of RVP control.)

      In  addition   to   having  Bonner   and  Moore  improve  the
modeling  itself,  EPA modified  the  modeling  results  in three
important ways to  better  reflect reality.  First,  we  excluded
the   results  for  Bonner  and  Moore's  Region  4  (California)
because   the   model's   predicted  base   case   fuel  contained
unrealistically  high  levels  of  butane  and   low  levels  of
pentane.   Second,  the  estimate  of  the  reduction  in  gasoline
volume  due  to  recovered evaporative  emissions  was  revised to
reflect  the  new higher  evaporative emission factors.   Third,
case  results  were adjusted to reflect the $20 per  barrel crude
cost  used in the NPRM.

      EPA  also applied  the results  of  the modeling  in a  more
sophisticated  manner.   Using  the  revised  state-by-state  RVP
baseline  levels   and  standards discussed  above,  EPA determined
the  current and  final RVP level  of  each state's fuel by month
for  each  control scenario  and applied a  refinery  cost to  each
oase.   This allowed the  determination of a  separate  cost for
each  of the three control levels  (9.O., 9.5, and 10.5 RVP).  As
described  in Section  II,  initial RVP  levels   thus   calculated
were  somewhat  lower  than those in the NPRM.

      Table  4-1 shows results  of the Bonner  and Moore  modeling
for  Regions  1,  2, and 3 as  described  in  their  study.   The  cost
estimates  shown  represent  the additional cost  incurred by the
refinery in producing low RVP  fuel (the  cost  to  the  refinery of
producing the control case  volume of  reduced-RVP gasoline  less
the   cost   of  producing  the.  base   case  volume  of   base-RVP
gasoline).  This cost can theoretically be separated into three

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                                  4-6
                               Table 4-1

                   Bonner and Moore RVP Control Costs
          (W/ Investment, $22/bbl crude, excluding California)
                                          RVP Reduction Level
       Region 1
Pool Avg RVP (psi)
Gasoline Volume (MBPD)
Direct Refining Cost (M$/D)
Direct Refining Cost ($/bbl*)

	Region 2	

Pool Avg RVP (psi)
Gasoline Volume (MBPD)
Direct Refining Cost (M$/D)
Direct Refining Cost ($/bbl)

	Region 3	

Pool Avg RVP (psi)
Gasoline Volume (MBPD)
Direct Refining Cost(M$/D)
Direct Refining Cost ($/bbl)

	 National	

Pool Avg RVP (psi)
Gasoline Volume (MBPD)
Direct Refining Cost (M$/D)
Direct Refining Cost ($/bbl)
Base
11.
648.
—
"
11.
2075.
—
^~^~
10.
3132.
—
"
11.
5857.
—
—
75
94


01
17


92
91


04
02


1st
10.
645.
11.
0.
10.
2064.
173.
0.
9.
3116.
370.
0.
10.
5825.
555.
0.
73
52
0
017
05
17
4
084
97
30
8
118
08
99
2
095
2nd
9.
642.
94.
0.
9.
2055.
664.
0.
9.
3103.
926.
0.
9.
5802.
1685.
0.
71
91
6
146
09
87
7
320
02
77
4
296
12
55
7
288
3rd
8
640
259
0
8
2047
1339
0
8
3091
1554
0
8
5779
3152
0
.69
.38
.1
.399
.14
.78
.6
.646
.07
.55
.0
.496
.16
.71
.7
.538
      Denominator is barrels of gasoline produced in base case

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                              4-7
individual components:  1) the  cost  to the refiner of  reducing
the RVP  of the  entire  base volume  of gasoline to the  control
level,  2)  the   savings  to  the  refiner  in  production  costs
resulting from a slight fuel  economy increase and corresponding
volume reduction,  and 3)  the  savings  to the  refiner  resulting
from  evaporative  emission  reductions  and  the  corresponding
decrease in gasoline volume requirements.

     For  the  purpose  of  estimating  RVP  control  costs  for
different ASTM classifications,  it  is  advantageous to determine
the first component of the cost  separately,  and to subsequently
take  credits   for  fuel   economy   improvements   and  emission
reductions.   To  do  this,  the  cost  savings   to  the  refinery
resulting  from  the  reduced  gasoline  volume   requirements  was
determined by multiplying the gasoline volume  reduction  in each
control case by  the pool-average incremental gasoline cost.   By
adding this value  to  the  costs shown  in Table  4-1, the  cost of
controlling  RVP   (excluding  volume  reduction  savings)  as  a
function of RVP levels was determined.

     Several  adjustments   were  subsequently  made   to  these
values.   First,  costs were  adjusted to a crude oil price of $20
per barrel.  Bonner  and Moore had evaluated the  sensitivity of
RVP  control costs to  crude  oil  price with  modeling  runs in
Region 3.   Cases were run  under $22,   $17,  and $27  per barrel
crude scenarios.   By interpolation, the cost  of  RVP  control at
$20  per   barrel  was  determined  for Region  3,  and  costs  for
Regions 1 and 2 were adjusted proportionally.

     Second, Bonner  and Moore also ran cases for Region 3 which
determined the cost of RVP  control  assuming no investments were
:tiade  by  refineries.   Since  interim RVP regulations will require
compliance  before  significant  investments  can  be made,  these
no-investment case results  are more representative of the short
term  situation.    Thus, the relative  cost  of  fuel  control in
Region  3 under  the  "no-investment" and "investment" scenarios
was  evaluated.   Next,  a  proportional adjustment  was  made to
"investment"  control  costs in Regions  1 and 2.  The  end result
of these adjustments  were  "no-investment,  $20  per barrel crude"
RVP  control  costs defined  for three  different  levels  of  RVP
control.   The  national average  costs  of RVP  control  are shown
i'n Figure 4-1.

     Costs  taken  from  this curve  were applied  on a  state by
state  basis  to  estimate  the   national  cost  of  the  interim
regulations.  EPA  estimated the current RVP of each states  fuel
by  month  from  MVMA  fuel  survey   data. [2]    As  described  in
Section  B.3.  above, these values were lower than those used in
the NPRM.   The  control RVP  level  was   then  determined for  each
state  according  to  state-by-state RVP  standards,  as  revised
from  the NPRM (see  Chapter 1).  An RVP control cost  was  then
applied to  the volume

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13
53
I
      3.00
      2.50
      -0.50
          12.00
                                     Figure 4-1
                           RVP Control Costs
                             ($20/bbl crude, excluding California)
11.00
                               a
             RVP
         No Investment
                                                       OO

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                              4-9


of fuel sold in each state over the  entire  compliance  period of
iroughly  five  months, using  EIA estimates  of monthly  sales of
petroleum  products.[3]    Costs  were  aggregated  according  to
volatility control  classification  for use  in determining class
specific cost-effectiveness.

     Results of  the analysis showed  that  in those  areas which
would  be required  to meet  the 9.0  psi Class  A standard,  no
control  costs  would  be   incurred.    This  is   because  fuel
currently sold  in Class A  areas  in  slightly less than 9.0 psi
already, and because all Class A/B  areas have been reclassified
as Class  B.   For fuel  sold  in areas  required  to meet  the 9.5
psi Class B standard,  an average compliance cost of  0.57 cents
per gallon  was  calculated.   Compliance costs  vary in  Class  B
areas,  however.   In  those  areas  formerly  defined  as  Class  A
which  have  been relaxed to  Class  B, no cost will  be incurred.
At the other  extreme,  in B/C  areas,  fuel  required  to comply
with Class B  regulations  will  cost an additional 1.63 cents per
gallon.  Average  compliance  costs  for  those areas  required to
meet  the 10.5  psi  Class C  standard  will be  0.56  cents per
gallon, with variations similar to those in  Class  B.   The total
::efinery  cost  of the interim standard  will be 0.54  cents per
gallon, or $247 million per year.

II. Fuel Economy and Evaporative Emission Recovery Credits

A.   Synopsis of the Draft Regulatory Impact Analysis

     The DRIA  examined  the  fuel  economy impact  associated with
volatility control.   Specifically,  since the heat of combustion
of gasoline  is projected to  increase with  volatility  control,
the  fuel economy of the gasoline-fueled  fleet  is  expected to
have  a proportional  increase.   Increasing  fleet fuel   economy
has  a  cost savings associated with  it,  and as  a  result,  this
was evaluated  in the DRIA.

     1.    Relationship of Fuel Volatility to Heat of Combustion

     The  relationship between  fuel RVP  and the  fuel  heat of
combustion  involves complex  refinery modeling,  since octane and
other  performance requirements must  be  maintained as the butane
and other  light hydrocarbons are removed from the fuel,  as  well
as due to the wide  range  of  commercial  fuel heats of combustion
for  any given  fuel RVP.  The  results of  a linear programming
model  developed by  Bonner  and Moore  were   verified  using  MVMA
fuel  survey data and used  to estimate  a  0.25 percent  increase
in fuel heat  of combustion with a  1  psi  reduction in fuel  RVP,
and a  0.56 percent  increase with a 2 psi reduction.

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                              4-10
     2.     Relationship of Heat of Combustion to Fuel Economy

     If  a  vehicle  were 100  percent  effective in utilizing  the
additional  energy  available  in  the  fuel  due  to  volatility
control   (no  change  in vehicle   energy  efficiency),  the  fuel
economy  would  be  expected  to increase  0.25  percent for  the  1
psi reduction in RVP  and  0.56 percent  for the 2 psi reduction.
Due  to   heat   losses  in   the   engine   and   certain   vehicle
operational characteristics,  a vehicle  typically  is less  than
100  percent  effective  in  utilizing additional  energy  in  the
fuel.  The result is that  the percent change  in  fuel economy is
less  than  the  percent  change  in  fuel  heat  of  combustion
associated with fuel volatility  control.   This  ratio is defined
to be "R".

     In   an attempt to  evaluate  R,  a  review of available data
showing   both  fuel  economy  and   fuel  heat  of  combustion  from
testing   with  different  fuels was  performed.   However,  for  a
variety of reasons, this  test data could not be used to define
a representative value for R.  Among these reasons  were:

     1)     The  large  error  in  fuel economy and  fuel   heat of
           combustion measurements (at best  1.0  percent and 0.9
           percent   respectively)   compared   to   the   maximum
           expected change  in  fuel economy of 1.6  percent,  and
           the   resulting   wide .  scatter   in   the  R  values
           calculated;

     2)     The  age  of much  of the  data and the  corresponding
           ability  of newer  closed-loop fuel-injected  vehicles
           to better take advantage of differences in the fuel;

     3)     The fact that typically the data  was  collected for a
           purpose  other  than  to  determine R,  resulting in
           variables   atypical  of   just  volatility   control
           changing during testing;
                                                          *
     4)     Test   fuel  differences   inconsistent   with  those
           expected   to   result    from   volatility   control   of
           commercial  fuel  (e.g.,  Large differences   in   fuel
           sulfur  levels,  aromatic levels,  distillation curves,
           etc.)  causing   fuel  economy  changes independent of
           the fuel heat of  combustion differences;

     5)     Testing of vehicles on different  fuels  without first
           modifying  the  vehicle  to  react  properly  to  those
           fuels (i.e., testing  with very high  volatility fuels
           at  high temperatures  resulting  in   overwhelming of
           the evaporative  control  system,  or testing with  very
           low  volatility  fuels  under   very low   temperatures
           resulting  in poor drivability).

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                              4-11
     Because of  the difficulties  in  using available  test  data
to  determine  the  appropriate  value  for   R,   a  theoretical
c.nalysis  of   the  combustion  of  fuel   in  the   engine   was
performed.    The   model  selected  analyzed  heat   losses  in  the
eingine as  a function of  not  only changes  in the fuel  heat of
combustion,  but   also  the  mean  effective  temperature  of  the
cylinder charge,   the fuel-air  ratio,  the  fuel specific gravity,
the change in air volume reguired, and the specific  heat of the
cylinder charge.   The  model was then developed  further  to  take
into account the  average  efficiency  of  a gasoline vehicle,  the
effects of  coast  and idle operation,  the effects of changes in
engine  friction,   and   the  effects  of  changes  in  fuel  pump
losses.  Other things  such  as cold  starting  on a  lower  RVP
fuel,  test  cycle  transients,   open  loop  warm-up  operation,  and
possible   changes   in   fuel/air   mixture   homogeneity   and
distribution were found to  either have no  affect on  the value
of R, or to affect it in a small but unquantifiable way.

     The result  of this  analysis  was an R  value calculated to
be  approximately  0.82  using  the fuel  changes  expected  with
volatility  control.   This  is well  within  the  range   of  the
civailable   test   data   mentioned  above.     In   addition,   the
theoretical  R  value using the  model  and the  average value  from
test  data  on  propane  matched  extremely  well.   Information on
methanol  vehicle  efficiencies was   then  used  to  determine   a
value  for  R of   0.95.    Due to the  large  differences  in   fuel
economy  and heat  of  combustion between methanol and gasoline,
the  errors  in measurement become  less  significant,   and  the
result more reliable.   As a result,  this value  was  selected as
an upper bound for R, while 0.82 was kept as  a lower bound.

     3.    Relationship of Gasoline Volatility to Fuel Economy

     When  the  relationship  between  the  fuel   volatility  and
energy density of the  fuel was combined with our best  estimate
f:'or  the  relationship  between the  energy  density  and   fuel
6>conomy,  the  relationship  of  gasoline   volatility   to   fuel
economy was determined.  The  result • was  that the 0.25  percent
increase  in fuel  energy density for a  1  psi reduction in RVP
was estimated  to  result in a 0.205 to 0.238  percent  increase in
fuel economy,  while the 0.56  percent increase in energy density
for a  2 psi  reduction in RVP was  estimated to result in a 0.459
to  0.532  percent increase.   When these fuel economy increases
were  applied  nationwide,  the  fuel  saved  was   credited  at   a
retail price (minus taxes) of  $0.82 per gallon of  gasoline.

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                              4-12
     4.     Relationship of Evaporative Purge to Fuel Economy

     In addition  to the  changes  in  the fuel  causing a  small
change  in  the fuel  economy of  the  vehicle, the  efficiency of
the vehicle at burning the vapors  (assumed  to  be  butane)  purged
from  the  evaporative  control   system   was  also  determined.
Assuming that the  vehicle  can  compensate for  the  purge  to
maintain stoichiometry, and applying the range in the R  value
discussed  above,  the  vehicle  was found  to  be  anywhere  from
0.976  to  3.492  percent  more  efficient   at  burning the  butane
from the purge,  than  from burning the  gasoline directly  from
the tank.  These  percentages were then  applied to  estimates of
the reductions in evaporative  HC emissions  with RVP control as
described in Chapter 5 of  the DRIA.

B.   Summary and Analysis  of Comments

     1.    Relationship of Fuel Volatility to Heat of Combustion

     No comments  were  received on this  aspect  of the  analysis.
However, based  on more recent  work  with the  Bonner  and  Moore
model,  new  estimates  for  nationwide  increases  in  heat  of
combustion with volatility control have been  made.   Following
the  refinery  modeling described in .Section  4-1,  volatility
control across the country to 10.5 psi in Class C areas  (9.5 in
Class  B areas, and 9.0  in Class A  areas) results in a  0.160
percent increase  in the  heat  of  combustion of  gasoline  (0.0,
0.108, and 0.199 for Class A, B, and C areas respectively).

     2.    Relationship of Heat of Combustion to Fuel Economy

     There were  a number  of  comments on the  proper use  of the
available test  data to determine the appropriate R  value  for
volatility control.   In the DRIA the available  test  data were
determined to be unacceptable  for  defining  an appropriate value
for  R,  and   instead were used  merely to  show that  the  value
derived  through  theoretical  modeling  was  in  the  range  of
possible values.   Certain comments from  MVMA,  GM,  and API  tend
to support our reasons for  this  decision, although none  of  them
agree  with  eliminating the use  of  the  test   data  entirely in
f.avor of theoretical modeling.

     GM  stated  that  combining  the  data   from  the  different
sources ignores  the effects on  fuel  economy of changes  in  fuel
properties other  than  the heat  of  combustion.   They conclude
that  each  data set (since  it  is  real  world) should be analyzed
individually  to  determine if  there  were   too many  variables
changing,  not  enough  data  available,   or  if  the  technology
represented was too old to accurately define  the current  value
of R.

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                              4-13
     We agree with GM that real world data  is  always  preferable
to   theoretical   modeling    when   reliable    data    exists.
Unfortunately, in  this  situation reliable  data  did not  exist.
All of the available  data,  aside from being severely inaccurate
due to the error  associated  with fuel economy and  fuel  heat  of
combustion measurement,   also  tends  to  be unrepresentative  of
the situation we are trying to model  -  fuel economy improvement
associated with  a reduction  in  fuel  RVP.   The  majority  of
available data was  collected using fuels  drastically  different
in  fuel  sulfur  level,   specific  gravity,  aromatics  content,
sjtoichiometric  fuel/air  ratio,  or  boiling  range,  compared  to
that  which  would  be  expected  with volatility  control.   In
addition, testing  was often done  under  conditions atypical  of
average  in-use  vehicle  operation,  such  as using low  RVP fuels
at  low  temperatures  and  high  RVP  fuels  at high temperatures,
causing  drivability  problems  which  could  lower  any  measured
value of R,   or  using vehicles  which  are unrepresentative  of
today's  electronically  controlled fuel-injected  vehicles.   The
result is that for the available data sets,  there are typically
too many variables changing,  not  enough  data  collected, and/or
obsolescent technology represented to accurately  define a value
for R representative of volatility control.

     MVMA pointed  out a  number of problems with a number of the
available data  sets, showing  that these studies  included far
more variables  than just the  heating value of the fuel.  As  a
iresult,  they  concluded  that  aggregating the  data  from  all
sources  by   model  year  was   devoid  of  any  statistical  or
technical rationale,  and went  on to  say  that  none of  the data
would support a change from the R value of 0.6.

     EPA  agrees  with this comment by MVMA in  general, however,
the  value  of  0.6  suffers   from  the  same  limitations  they
mention.  The test  data which  determined this  value  was from
1970  and  1972  vehicles  which  could  not  be  maintained  at
stoichiometry   (i.e.,   freguently  ran   rich   which  tends  to
decrease R) .   The  fuels used in  the testing were not production
gasolines,  and  as  a  result  had significant   differences  in
percent  aromatics, specific  gravity,  and distillation curves in
addition  to  the  heat of combustion  differences.   In addition,
the heat of combustion was not measured,  but  estimated based on
other  fuel   properties,   and the fuel  economy was  measured by
weighing  the fuel and  measuring the  distance traveled.   As  a
result  there was  a significant  degree of error associated with
this  testing  as  well   even  though   replicate  testing  was
performed.   The  report   itself  states  that   "[B]ecause  of the
limited  number  of cars   involved,  these  tests  can  only give an
indication  of  1970  and  1972  car  performance   in  general."
Calculation  of  R  from   the  small  changes  in  fuel  economy and
heat  of  combustion  is   hardly  a  "general"  observation.   The
bottom   line  is  that MVMA  is  correct   in   stating  that  the
available data  cannot support  a change  from the  R value of 0.6

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                              4-14
which they support.  However,  neither  can the available data be
used to support the R  value of 0.6 (or any other  value).   As a
result,  EPA  did  not  use  the  data  either  individually  or
aggregated  to determine  R,  but   instead  selected  theoretical
modeling  to  determine  the  R  value  associated with  volatility
control.

     In their effort to support the. use of test data  as opposed
to  theoretical  modeling,   API stated  that  experimental  data
properly  interpreted  and sufficiently representative  of actual
conditions  provides  the best  estimate  of R,  since  theoretical
mechanisms are not  well understood.   They went  on to  say that
reliable  experimental   results   can  be   generated   when  test
variability exceeds the measured  effect  by multiple  testing of
certain combinations  of parameters,  and that  it  is  possible to
determine  cause  and   effect   relationships  from  limited  data
sets.   They  then stated that  although the data on recent model
vehicles  suggests  that  the R  value  may  be  higher   for  newer
vehicles  than that measured on older vehicles, the  data is too
limited to  place  any   confidence  in  this assertion.    Instead,
they emphasize  that Chevron data  on  1973-6  model year vehicles
is  the most  acceptable  since  it was  done  using  commercial
fuels,   and that  a  value of 0.6 for R based  on this  data is the
most appropriate estimate.

     We also  agree with API  that test  data  is  generally the
most  reliable  source  of  information.    However,  we  do  not
believe, nor did they establish, that any  of  the  available data
met  the stated conditions  of  being  sufficiently representative
and of having included  multiple testing  of certain combinations
of  parameters.   As stated above, none  of  the  data  sets meet
these  requirements.   This  includes  the  Chevron  data,  which
suffers from  unrepresentative  levels  of  aromatics and sulfur in
the  fuels,  differences  in  distillation curves and API  gravity,
vehicles  unrepresentative  of  today's  vehicles,  and  vehicle
testing   aimed   at  poor   drivability   which  may   affect  R.
Theoretical analysis even  with all of its uncertainties appears
to be the best available option.

     In addition to comments  on the use of test  data, a number
of  comments  were also  received  concerning the accuracy of the
theoretical model developed to evaluate  R.   Although there were
a  few  comments concerning  possible errors  in the modeling, the
majority of these  comments  focused on parameters  the  commenters
believed  would  affect  the value of R which  were  not taken  into
account in the model.

     API  reiterated  comments  on the  volatility study  which
questioned  the effects of cold  starting,  idling  and  braking,
and  transient operation on the value of  R.   All  of  these have
already been  discussed  at  length in the  DRIA.   Cold start was
determined  to cause a  likely decrease in the value  of R, but

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                              4-15
was not  found  to be  quantifiable.   The effects  of idling  and
braking have a  similar  directive  effect,  and were,  if  anything,
overcompensated   for   in   the   model,   and  transients   were
determined  to   have 'little  or  no  effect  on the  value of  R.
Thus,  there  appears  to be  a good balance  in the  unquantified
nature of these parameters.

     In  addition,  API  made  the   comment   that   the  poorer
driveability associated with  lower volatility fuels will result
in  lower  fuel  economy and  therefore,  lower  R values.   For  this
statement  to be  true,  not  only  must  the  level of  volatility
control  being   proposed   result  in   overall  poorer  vehicle
drivability, but  the  resulting  difference  in driveability  must
also  significantly  affect  the  value  of  R.   In  answer  to  the
first part,  it  is not  necessarily  true that  a  fuel  volatility
reduction  of  the magnitude proposed will  result in  overall
poorer  driveability.   Few  vehicles  (mainly  older,  carbureted,
and improperly  maintained vehicles)  are  expected to experience
noticably   poorer  cold-temperature   driveability  on   fuels
controlled  to   the  levels  proposed  by EPA.   In addition,  any
possible detriment at  cold temperatures will  likely be negated
by  improved  driveability on  vehicles  (mainly older,  carbureted
vehicles)  at high temperatures.   The  result is that  even  if
driveability  affects   the  value  of  R,  the  direction  of  the
offect is uncertain,  and  is likely  negligible.  This especially
true  for  the   level   of  volatility  control  pr'oposed  in  this
interim  rulemaking.    As  discussed   in   Section  4-III,   no
detriment  in vehicle  cold-temperature  driveability is expected
with  this  level  of   volatility  control,   only an  unquantified
hot-temperature driveability  improvement.

     In  answer  to the second part of  the comment,  although poor
driveability probably  tends  to  decrease  the value  of  R,  for
driveability  to   affect   it  significantly  the   reduction  in
driveability will have  to be much more  pronounced  than  that
expected  to result from volatility control.  Data provided by
API  in  their   comments  on  the  DRIA tends  to   support  this
statement.    Testing    on   6   recent  model  vehicles   at    3
temperatures ranging  from 42°F  to 80°F, and  on  4  fuels  ranging
in  RVP  from 6.5 to 10.5  resulted in no correlation between the
level of drivability demerits and the  R value due to volatility
control  (there was a  more pronounced effect of  temperature).
As  a result, it  is doubtful that  driveability effects resulting
from  the range of volatility control  in  question will have any
substantial  impact on the value of R.

     API also  discovered a  small error in the model.   For the
calculation  of the gas flow per unit time  which  was  an input
into  the  model,  the   thermal  efficiency  of the  vehicle  was
assumed  to  remain  constant for   all  cases  at  38  percent.
However,  in order  for R  to be  anything  other  than   one,  the
thermal  efficiency  must  change.    Fortunately,   the  effect  of

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                              4-16


assuming thermal efficiency  constant for this purpose  over  the
range of change  in the  actual thermal  efficiency expected  is
negligible,   and  the  model's  outputs  remain  the same.   Since
there is no  significant effect, and since changing the  model  to
correct  this error  would make   it  even more  complicated,  no
change will  be made.

     GM  made the  comment that   the  hydrogen to carbon  (H/C)
ratio  and  heat of  combustion of the fuel  (in   BTU/lb)  should
also be taken into account in the modeling, since the  H/C ratio
affects  the  heat  losses from the engine.  Both of  these points
are true to  some extent, and that is why the  heat of  combustion
per  pound  of fuel has already been  taken  into   account  in  the
model.  The  H/C ratio,  on the other  hand,  is only a  secondary
measure  of   other  primary changes  which  take place  with  the
fuel.   As   a result,  the  influence  of H/C on the  heat  of
combustion  of the  fuel  has  already  been taken into  account
directly by dealing  with the heat  of  combustion itself.   As
stated  by  GM the  H/C  ratio  also affects the stoichiometry  of
the  fuel.   The H/C  ratio, however,  proves to be a rather poor
measure  for  moles  of  products per  mole of reactants  (which is
how  GM  tried to use  it  in  their comment).   Although  the  H/C
ratio   decreases   with  volatility  control,   stoichiometric
analysis using  the fuel  properties  shown  in Table 4-2 reveals
that  the ratio  of  moles of products  to moles of  reactants
actually  increases  slightly  with  volatility  control.   As  a
result,  any additional  changes   to  the  modeling based  on GM's
comment and the above discussion  would  if  anything increase the
value of R.   The  magnitude  of the difference is  not significant
enough, however, to warrant a change to the model.

     API raised a  related issue  which they felt  should  also  be
taken   into  account  in  the  calculation of R.   The  maximum
pressure rise and resulting  work output from the engine  is a
direct  function  of  the number  of  moles of  working  fluid   (in
addition to temperature).   However,  for  equivalent   speed   and
power,  a higher energy density fuel requires less fuel which in
turn  results  in fewer moles  of working  fluid.   Therefore, this
will  tend   to  decrease  the  value  of  R.    In  addition,   the
reduction in fuel  required  results  in  a lower demand  for air.
This  in turn results  in higher  throttling  losses which also
will decrease the value of R.

     Stoichiometric  evaluation of  both  11.5 and  9   RVP fuels
using   the   calculated  fuel  properties  shown   in  Table  4-2,
reveals  API's comment  to be  true,  at  least in  part.   If  we
assume  constant  energy input  into the  cylinder,  the  9 RVP fuel
requires approximately 2.94  percent  fewer  moles  (0.73 percent
fewer  gallons) of  fuel  resulting  in  a slight  (0.05 percent)
decrease in  the  number  of  moles of  combustion  reactants   and
products.   However,  there is actually a very slight increase in
the  amount  of air required for stoichiometric combustion.

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                         4-17
                      Table 4-2

                   Fuel Properties

                    Butane     9 RVP
Fuel Parameter            	

Heat of Combustion:
BTU/lb                    19643
BTU/Gallon                95661.4
I3TU/mole                  1141729.7
Avg Molecular Weight      58.124
Avg Chemical Formula      C4H10
H/C Ratio                 2.25
Molar A°/F° Ratio (Stoic) 30.94
Mass base F/A (Stoic)     0.065115
Specific Gravity          0.5836
Density (Ib/Gallon)        4.87
Charge Specific Heat
(BTU//lbm °R)             0.2847
                               18500
                               114330
                               2053618.4
                               111.006
                               C8H14.8
                               1.85
                               55.692
                               0.069087
                               0.7405
                               6.18

                               0.2826
11.5 RVP*
18540.9
113489.9
1993233.3
107.505
C7.735H14.482
1.87
54.053
0.068937
0.7335
6.121

0.28267
*     Values  calculated  based  on  the  replacement  of  1.8
      volume  percent  of  liquid gasoline with  butane  per 1
      psi increase in fuel RVP.  -

Note: Some  values may  vary  slightly  from those  in  the
      DRIA.    Those  shown  here  are  thought  to  be  more
      internally  consistent   since   they   are  calculated
      based onstoichiometry.

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                              4-18
     This effect  can  be analyzed  by  using a  simplified  model.
If we assume that  miles driven are proportional to the moles of
products  of  combustion,  then  the fuel  economy  increases  by
appoximately 0.685  percent (over  an  assumed baseline  of  28.35
mpg with  the 11.5  RVP fuel)  for a 0.74 percent  increase  in the
heat  of  combustion of  the fuel per  gallon.   This yields  an R
value of  0.93.   Therefore,  API was  correct  in their  comment
that  the  R value  should decrease due to  a  decreasing  number of
moles  of  working  fluid  (assuming  constant   energy  input).
However,  since this is  a different modeling technique than that
done  by  EPA  in the  DRIA,  it  is  a  decrease below  l.o,  not  a
decrease  below the EPA  values.   (EPA's  model looked at a change
in the energy  required  to  go  one  mile.   This  model looks  at a
change in distance traveled assuming  a  constant energy input.)
This  value  is  then  reduced  by  other   effects such  as  idle
operation just as  the initial  R value of 0.931 from EPA's model
in the RIA was  reduced.  The  result that the R value  from this
new model is  very similar to  that calculated  in EPA's earlier
modeling.   As   a   result,  no  change  will  be  made  to  EPA's
existing model  due to this comment.

     Contrary to  API's  comment,  the  effect of throttling losses
does  not  decrease the  value  of R.   As  stated  above,  although
less  fuel  is   required at  lower  RVP,   slightly  more air  is
required, tending to decrease throttling  losses and  increase
the value of R.   However,  the small change in air required, and
the small percentage  of throttling  losses to  the  total  energy
consumption of  the vehicle  (only a  portion  of the  6 percent
allocated  for   pumping  losses  in  the  DRIA)  results  in  no
significant changes to  the value of R.

      In  another  comment, API  questioned  the appropriateness of
using experimental  values  from methanol  and propane  to  verify
the  model.   The  intent  in  using these  fuels was to provide
significant differences in the measured  heat of combustion and
the measured  fuel  economy.   As  a result,  the errors  in fuel
economy   and  heat  of   combustion  measurement  were  small  in
comparison to  the differences  in those  properties  between the
fuels.  Thus greater  confidence could be  placed in  the R values
calculated using  these   fuels than when  two gasolines  were used
which    only    had     slight    differences    in    properties.
Unfortunately,   while   a  greater  level   of confidence can  be
placed in the  accuracy  of  the  R  values  calculated  if  fuels as
widely  different  from   gasoline   as  propane  and methanol  are
used, the R values calculated  are no longer  representative of
those expected  from volatility control.   Many parameters other
than  the  fuel  heat of combustion  affect  fuel economy,  and many
of  these  are taken into account in the  model  used to determine
R.  However, the  differences  in these parameters resulting from
volatility control are  very  different  from those  which  exist
between   gasoline  and   propane   or   gasoline   and  methanol.
Therefore the   only   accurate  means  of  determining  an  R  value

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                              4-19


Associated with volatility control  is  to use only those changes
in fuel properties and vehicle operating parameters  expected to
result from volatility  control.   As a result, EPA will  not use
•:he results from comparing propane or methanol to gasoline  as a
means to determine a  representative value for R for  the case of
gasoline volatility control.

     In  the  process  of  evaluating  these  comments,  it  was
discovered  that  the  portion  of  the  model dealing  with engine
friction was  in  error.    Since  engine friction  is   expected to
decrease due  to  an increase  in the power  output  per stroke, an
increase in the  energy  density  of the fuel should increase the
value of  R.   The  effect  of  the  previous  modeling was just the
opposite.   Upon  reanalysis,   it  appears   that  the power  output
per  stroke  is  proportional  to  the  heat  energy per mole  of
reactants in  the cylinder, as well as to the heat  losses  from
the cylinder  walls,  and not  proportional to the heat energy per
pound of air  in  the  cylinder.  The  effect of this  change  will
be shown in the conclusion of this section.

     3.    Relationship of Gasoline Volatility to Fuel Economy

     There  were  no  comments  on  this  portion of  the analysis,
and as a  result,  the only changes  made  are those which result
from the changes in the previous  sections.

     4.    Relationship of Evaporative Purge to Fuel Economy

     In  the  DRIA EPA  took  a  credit  for  the energy  value of
evaporative   emission  reductions   which  resulted   from    its
volatility  control  program.    To  do  this  EPA  multiplied  the
emission   reductions   by  a   recovery  factor   or   combustion
efficiency  of the vapor in the engine.  Ford raised the comment
that  the manner  in  which this evaporative  recovery factor  was
applied  was   in  error.   They  stated  that  the  evaporative
recovery  factor   as  determined   is   only  applicable  to   the
evaporative   emission  reductions  which  result  from  vehicle
control  (i.e.,  are captured  by the canister and burned in  the
engine).  The evaporative emission reductions which result  from
fuel control  (i.e.,  uncontrolled  vehicle evaporative emissions,
running  losses,   evaporation  from  storage and  handling,   etc.)
directly replace fuel going   into  the  vehicle, and  as a result
should be credited on a one for one basis with liguid gasoline.

     Ford   is  correct;  the  manner  in   which the  evaporative
recovery  factor  was  applied in  the DRIA  was in error.   Only
those  emission  reductions which  result  from vehicle  control
should  be  multiplied by  the  evaporative  recovery  factor   since
they  are the  only emissions  which are  burned in the engine as
purged  vapor.   Emission  reductions  which  result   from   fuel
control  should not be multiplied by this  factor, since  they  are
not burned  in the engine as  purged vapor.  As  stated by  Ford,

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                              4-20
the  appropriate  "factor"  to   be   applied  to  the   emission
reductions resulting  from fuel  control  is  1.0,  since  they  are
converted to liquid fuel.   The appropriate  factor to be applied
to  the  emission  reductions   resulting  from  vehicle  control,
however, received a number of comments.

     MVMA stated  in their comments  that instantaneous  control
of the  air to  fuel  ratio  is  not possible due to  the broad range
of control  needed  for  the range  of vehicle  operation.   As  a
result,  the  ratio  of  the combustion  efficiency of the  purged
vapor  compared  to fuel from  the tank should be less   than  100
percent.   Ford   echoed   this   statement,   but   gave  different
justification.    According to  Ford,   vehicles  often  purge  the
canisters during  periods  when the vehicle  is not  doing  useful
work (i.e.,  idling).  As a result, they  estimate the combustion
efficiency of  the purged vapor  to  be only 50 to 60 percent of
that for whole gasoline.

     EPA  staff  do not  believe Ford's comment  to  be  relevant,
since  very  few  vehicles  purge  during  idle, and  even for  the
small fraction that do, the fuel consumed during  idle  is  only a
small fraction of the total fuel consumption of the vehicle.

     The  concern  expressed by MVMA  has  some validity.   Today's
vehicles  typically  use  exhaust  oxygen  sensors  to  maintain
engine  operation  at stoichiometry.   When a slug of hydrocarbon
from a  canister  enters  the engine,  there is a time lag between
when  the engine  burns  the  hydrocarbon,  and when the  oxygen
sensor  reads   a   low  oxygen  level.   As a result,  until  the
vehicle  can  correct  back  to   stoichiometry  the  vehicle  will
operate  rich,  and not  achieve optimum  use  of  the  vapors  from
the  canister.   Improved  purge  solenoids which  slowly increase
the  purge rate to  the  engine instead of  allowing  a  "slug"  of
hydrocarbon to  enter the engine are expected to go a long way
in improving  the engine's effectiveness  at burning the  purged
vapors,   but   nevertheless  the  vehicle   will   still  operate
slightly  rich  during the time lags  associated  with the  number
of  small increases in purge.   (For this  rulemaking, EPA  has
assumed  that these  more sophisticated and  slightly more  costly
purge  solenoids will  be  used  on  future vehicles  to  meet  the
exhaust  emission  standards.)    Although  this can   be  used  to
explain  why the  actual combustion  efficiency  of  purged vapor
compared  to  liquid  fuel  may  be  less  than  that  which  is
theoretically  possible  (determined  to be  1.00976  to 1.03492 by
EPA  in  the DRIA), it does not help quantify the effect.

     GM also  supported  a reduction  in  the  assumed combustion
efficiency of  purged vapor.   They performed 22 repetitive tests
on  a  prototype  vehicle   equipped  with  an  onboard   refueling
canister  in which  they measured simultaneously over  the  1972
FTP  the fuel  economy and the mass of hydrocarbon purged  to  the
engine.   On  the  basis  of  this  testing  they  estimated  the

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                              4-21


combustion  efficiency   of   the  purged  vapor   including  any
improvement due to R to be 90 percent, and  suggested  80  percent
a.s a value practical for real world application.

     Unfortunately,  GM provided  little supportive  information
describing how  the  testing  was  performed,  and  no  supportive
information  for  why  the  real  world  value  should  be  so  much
lower.  Nothing was  said  as  to  the vehicle tested, the  type of
purge  control  system,  the  method used  to  measure the  mass of
the  purge,  as  well  as  many  other  important   criteria  for
evaluating  the  data.    It   is  assumed  that  GM  performed  the
testing  on  a  vehicle  equipped  with  a  current  evaporative
control system,  and a  saturated  onboard canister.   The  onboard
canister GM  used was  likely larger  than that  required by  EPA
for  the  evaporative  controls  proposed  in  August  of  1987.
Purging this  saturated canister  would  result in  a  worst  case
flow  of  hydrocarbon  vapor  to  the  engine.   Since it  is likely
that  the  combustion efficiency of  this  purged vapor  decreases
once  the  amount  and concentration of  HC purged to  the engine
exceeds the capability of the  engine  to fully adjust,  the  low
combustion efficiency determined by GM  using a vehicle with a
"stock" purge  control system and an  oversize canister  appears
reasonable.   However,  EPA  expects manufacturers  to  introduce
improved  purge  control  hardware and   software  on  their  new
vehicles to  eliminate the majority of  operation  outside of the
vehicle's  ability  to  properly  adjust  for  the  purge.    EPA
oxpects this  to be true  even under the  current  proposals  which
will  likely  require larger  canisters  to control  running losses
and other currently uncontrolled  evaporative emissions.

     The  hardware  and  software  necessary  to accomplish  this
task   appears   to  already   exist   as  is   evidenced  by  the
performance  of  vehicles  in  EPA's running loss  test  program.
Some  of the  vehicles, as shown  in  Table 4-3, appeared  able to
effectively  handle the amount  of vapor being purged even  with
the  use  of current  high RVP fuels at  high  temperatures  (well
above  the  95°F starting  temperature).   The vehicles maintained
low emission rates  without experiencing  elevated  exhaust HC and
CO  emissions  (indicative of  stoichiometric operation).   As  a
iresult, it can be  said that vehicles  exist today  that appear
able  to handle  large quantities  of vapor without deviating  from
stoichiometry and  most likely without encountering fuel economy
detriments.   Thus,  it  appears  that the  ratio of  the  combustion
efficiency of purged  vapor to liquid  fuel  is likely to be close
1:o  the theoretical maximum  for new vehicles  designed for  such
conditions.   In  addition,  these  vehicles  were  tested  under
conditions  of elevated  temperature  which  are much  more  severe
than  the July-average  temperatures used  by  EPA to determine the
evaporative  recovery credits.  Using July-average temperatures,
the evaporative control  systems  on  the vehicles  would have  been
Less  severely  stressed,  and  as  a result,  would  likely  have
maintained stoichiometry  even better.

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            Table 4-3




Running Loss Test Program Results
Veh No
255
256
259
260
261

Temp °F
95
95
95
95
95

Fuel RVP
11.7
11.7
11.7
11.7
11.7


Exh HC (q/mi)
0.521
0.285
0.292
0.365
0.534

1st LA4
CO (g/mi)
5.415
5.152
3.307
4.617
6.872


Running Losses
0.36
0.00
0.06
0.04
0.04


Exh HC
0.377
0.179
0.216
0.260
0.384

2nd LA4
CO
3.988
3.781
2.962
5.377
6.547


RL
2.59
0.00
0.01
0.02
0.61






i
N)
NI

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                              4-23
     In the  DRIA,  EPA assumed,  based  on R value  calculations,
•chat the combustion efficiency  of  the  purged vapor was slightly
greater  than  1.0.   The  theory  of  purge  control,   and  the
subsequent combustion  in the  engine,  suggests  that this  is  a
maximum, and  that  the real  world value  is probably  something
less.   GM's  data   probably  represents  an  overly  pessimistic
conditions; thus,  the  evaporative recovery  factor  is  probably
greater than  0.90.   As a  result,  a realistic option  may  be to
assume  the  combustion  efficiency of the  purged vapor  compared
to  liquid  gasoline  (the  evaporative  recovery factor)  to  be
L.O.   Therefore, whether  the  emission  reductions   are  expected
to  result  from  fuel  control or  vehicle  control,   they will be
credited at  100  percent  of  the value  of  the liquid fuel  which
they displace.

C.   Conclusions
     1 .
           Relationship of Fuel Volatility to Heat of Combustion
     The comments provided by  the  manufacturers resulted in few
significant  changes  to  the  R   value   analysis.    EPA  still
believes that theoretical modeling is  the best available option
for  estimating  R due  to the  severe  limitations  on the  test
data.   The  only  change 'to   the  DRIA's  theoretical  modeling
resulted from  a discovery of  an  error  in  the previous  model.
The corrected model is now:

     Q2 = (0.62)Q2ificyl2l +
                   Qcyll
                                     Qcl
           (0.13)0! * QfT * (A°/F°9 + 1) *
                      Qf2 * (AVF0! + 1) * Qcyll
     Where:
Q     =the energy required to travel one mile
Qcyl  =the ratio of heat lost to the
      cylinder walls to the  heat  of combustion
      of the fuel
Qc    =the heat of  combustion of the  fuel  per
      gallon
      =the heat of  combustion of the  fuel
                 Qf
                       mole
                 A°/F° =the
                                                             per
                 1
                 2
                             molar  stoichiometric  air  to  fuel
                       ratio of the fuel
                       =the baseline fuel
                       =the new fuel
     Solving   this   equation   for   Q2/Ql    using   the   fuel
 property  data in Table 4-2 yields  a value of  1.00107 which when
 substituted into  equations  2  and 3  from  Chapter  5,  Section V of
 the  DRIA yields an R value of  0.85,  just slightly greater than
 the  value of  0.82  in the DRIA.

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                              4-24
     Due to the unrepresentativeness  of  other  fuels of the fuel
changes expected with RVP  control/  the R value  of 0.95  in  the
DRIA based  on methanol  is probably  not  appropriate,  and as  a
result, the value of 0.85 based on the theoretical  model  stands
alone as the best estimate for R.

     2.    Evaporative Recovery Factor

     The  comments  provided  by  the  manufacturers  resulted  in
only  a  minor  change  to  the   evaporative   recovery  factor.
Comments by  Ford indicated that while EPA had assumed there to
be  only one  evaporative  recovery factor,  there were  actually
two:    one   for  use   with  evaporative  emission  reductions
resulting from fuel control,  defined to be 1.0;  and one  for  use
with  evaporative  emission reductions  resulting  from  vehicle
control.   Following  analysis  of  the  comments,   this  latter
factor  was  reduced  from  a value slightly  greater than  1.0 as
used in the DRIA,  to  a value  of  1.0.   Since  the evaporative
recovery factors  were approximated to be 1.0  regardless  of  the
source  of the  evaporative  emission  reduction,  the  treatment of
the fuel related  and vehicle  related emission reductions in the
cost effectiveness  section of this  document  will   be  identical
(consistent with the DRIA).

     3.    Summary of Credits

     The refinery costs  presented in Section 4-1 do not include
a  credit for  increased  fuel  economy or decreased evaporative
emissions, however.   Based on the R  factor  analysis  above,  and
the  Bonner  and  Moore  estimates of  the  fuel  energy  density
increases  and corresponding  gasoline volume  demand  decreases
expected  with RVP  control,   the total  reduction  in  gasoline
volume   demand  was   calculated.    The  societal  cost  savings
associated  with  this  reduction  in  gasoline  volume  will  be
approximately  $51  million per year.   The  interim regulations
will also  result in  evaporative  emission  reduction of  190,000
tons per year,  derived  as in the  Draft RIA  (616,000  tons  per
year  including running  loss   estimates,  See  Table 3-2).   The
economic  credit  associated with  recovery of  these evaporative
emissions  is  a   approximately  $54  million   ($174   million)
annually (See Table 5-1).

Ill. Drivability and Safety Impacts

A.   Synopsis of Draft Regulatory Impact Analysis

     1.    Volatility Increases and Driveability Problems

     In the  period  from 1974  to  1985 the volatility of unleaded
regular gasoline increased by 10  to  20 percent depending on the
area  of the  country.   In 1985  for  the  first time the average
nationwide   summer   volatility   surpassed   the   average  ASTM

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                              4-25


recommended  limits.    The  result  has  been  that  even  though
vehicles during  the  same period  have  been designed to  operate
better on higher volatility  fuels,  some vehicles have  begun  to
experience  varying  levels  of  vapor   lock  and  fuel  foaming
causing   unacceptable   driveability.     This   statement   was
supported by comments  on the 1985 Volatility Study,  information
provided by  automobile manufacturers,   and  also  by a  number  of
studies in the  literature  which  had looked into the problems of
hot  temperature   driveability.    These  studies   showed  that
volatility  levels  were  indeed  to  a  point  where  driveability
problems could be expected on some vehicles.  At  the  same time,
other  studies  demonstrated that  for the  period of control  and
the  level  of  control  proposed,   cold   temperature  driveability
should not  be  a significant  concern.   This  last  statement  was
supported   by   in-use  information    from   California   where
volatility has already been controlled for some time.

     2.    Driveability Cost Estimation

     The cost  associated with current  driveability problems (or
the  cost  savings  resulting  from  improved  driveability  with
volatility control) was  estimated by assuming that people whose
vehicles are experiencing  driveability  problems  were  willing to
pay  an extra  10 to  30  per  gallon  for fuel which would avoid
those  problems.   Temperature  and population data  for  the  10
largest  ozone  non-attainment cities were  used  to  approximate
the  nation  as  a whole.   This information  was  then used along
with vehicle age distributions,  usage  patterns and information
on the fraction  of vehicles  with unacceptable driveability from
Coordinated  Research  Council  (CRC)  testing  to determine  the
fraction  of   fuel   sold  nationwide  which   is   burned  under
conditions   of  unacceptable  driveability.    Multiplying  this
amount of  fuel by  the 10 to  30  per  gallon  yielded estimates of
up  to  $78  million  per  year  for the  nationwide cost  of poor
hot-temperature driveability.

     Although  EPA  did  not   rely on   it  for  the  final  cost
estimation,  GM  and  Chrysler  provided  information   on   in-use
vehicles which also demonstrated  that  the costs associated with
hot  temperature driveability problems  were  real.   On the basis
of the information they  provided, annual warranty  costs  due to
hot  temperature driveability problems  amount to  roughly $8.1
million  annually,   and  costs  associated with  vehicle   design
modifications  to  avoid  hot  temperature driveability problems
have amounted  to roughly $124.1 million  annually.   EPA  decided
that  not  all  of these design costs could  be recovered  if fuel
volatility  were reduced,  however,   since they  are costs that
have  already  been incurred  to   fix the problems.   Still,  the
estimated  cost  savings   if  volatility  were  reduced   due  to
removal  of  certain   corrective  parts   from the  vehicle  was
estimated  to be $44  million annually.   Since the  accuracy of
the  methods used  to  extrapolate  the  information provided by

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                              4-26
Chrysler and  GM  into nationwide costs was unknown,  these costs
were not  relied on.   However,  they  did serve  to  support  the
costs calculated above.

B.   Summary and Analysis of Comments

     1.    'Hot Temperature Driveability

     In   general,    the  comments   on   the   hot   temperature
driveability analysis were  somewhat  limited.   The  oil companies
who  commented on  the  topic of  driveability were  generally in
favor  of  EPA  setting  volatility  standards,  but  the level  of
control  recommended was typically  that  of  the  current  ASTM
levels or slightly lower.  They cited reasons  such  as poor cold
temperature  driveability,  the  lack  of a  clear  benefit  for
further reductions, and  fuel explosivity at  low  temperatures as
reasons why reductions  much below ASTM were not justified.  The
motor vehicle  manufacturers, consumer  groups,  and environmental
groups   who   commented,   however,    cited   hot   temperature
driveability   problems   and  hot  temperature/high  volatility
safety  problems  as justification  for  supporting EPA's proposed
level of control, with some recommending levels even lower.

     API,  Texaco,   and  Sunoco  provided the  only  substantive
comments  on  the  topic  of hot  temperature  driveability with
their criticism of EPA's  use of CRC  driveability studies.  They
stated  that  the CRC hot temperature driveability  test,  due to
(among  other  things)    its  extremely   severe  nature,   is  not
representative  of  in-use operation.   As a result,  they stated
that  comparisons  of. the  results  from  this  testing are  not
directly  applicable  to  consumer  acceptability of  a given fuel.
They  also  stated  that  some  of   the  testing had  confounding
results,  and  that typically  it   was  necessary  to  exceed  the
recommended    ASTM   ratings   to   obtain    markedly   poorer
driveability.   They also pointed out  that  Figure  5-13  of the
DRIA  (from which  the  cost  estimates  of  poor  hot  temperature
driveability  were  derived)  was  used  incorrectly.   They  stated
that the figure, taken from a CRC  report, was  used as a  measure
of  consumer  satisfaction for  a  given  fuel  RVP,  while  in  fact
the figure was derived from CRC trained  rater data.

     Based  on information  contained  in  the DRIA,  the comments
discussed  above,  and  comments  by  other vehicle  and consumer
groups,  it  is still apparent that hot  temperature driveability
problems  exist,  and  represent  a  significant  cost  to society.
However, EPA's earlier attempt to  quantify  that  cost  appears to
have been  flawed.   The vehicle manufacturer information  used to
support  the cost  credits,  however,  remains as  a justification
for   hot  temperature   driveability   credits   with   volatility
control.   However, since the  accuracy of these  estimates on  a
nationwide  basis are unknown,  it does not appear appropriate to
take  a cost  credit  for  improved hot  temperature driveability.
Also,  since the driveability cost benefit proved to  have such  a
small  effect  on the  cost effectiveness  of volatility  control in
the  DRIA,  this change  should have little overall effect on the
regulation.

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                              4-27
     2.     Cold Temperature Driveability and Safety

     In  comparison to  hot  temperature driveability,  a  great
deal of comments were  received on  the  topic of potential  cold
temperature driveability problems if  fuel  volatility is reduced
significantly  below  the  ASTM   ratings.    However,   since  no
comments were  recieved  suggesting that  the gasoline volatility
control proposed  in this  regulation  will  have any  detrimental
effect  on   cold   temperature  driveability   and   safety,   the
comments on this topic will not be discussed in this rulemaking.

     3.     Hot Temperature Fuel Safety

     In  addition   to  comments  on  cold temperature,  low  fuel
volatility   safety,  comments   were  _also  received  on   hot
temperature, high  fuel volatility safety.   IIHS,  CAS,  and  NADA
all  provided comments describing the current safety  hazard of
high  volatility fuels during high  temperature  operation,  and
stated  that EPA's  proposed  volatility  control  will  go  a  long
way  toward  eliminating  this problem.   CAS  stated that  since
L979, 71  fires, 25 injuries,  and 2  deaths have been linked to
12 vehicle recalls  linked  to  fuel system overpressurization and
fuel  volatility.    While . they  acknowledge that vehicle  design
also plays a significant role in  fuel system overpressurization
and  fuel  spurting  issues,  they  also "maintain that  control of
in-use fuel volatility will reduce the problem.

     The  issue of  hot-temperature  safety   is  also  an  issue of
merit.  Reducing the  volatility of  in-use  gasoline should serve
to   reduce  the  problems  of  fuel   spurting  and  fuel  system
overpressurization.   However, it is  not possible  on  the basis
of   existing  data  to   determine  to  what  extent  historical
hot-temperature  safety  problems would have been  avoided  or
substantially  reduced  in severity  if fuel volatility  had  been
lower, much less  to project this into the  future.   As a result,
no   evaluation  of  possible  benefits  due  to  RVP  control  is
attempted here.

C.   Driveability  and Safety  Economic Impacts

     Although  economic  impacts of  hot  temperature driveability
and  safety were discovered,  no  good method of quantifying their
effect  could  be  found.   As  a result,  no credit  is  taken for
driveability   or   safety  impacts   in  this   rulemaking.    In
addition,   since   the   level  of  volatility  control  in  this
rulemaking  is  low,  no cold temperature  impacts are expected.

IV.  Enforcement Costs

      The  costs of  several different enforcement   options  were
presented  in the  Draft  RIA.   Costs for the enforcement options
evaluated were estimated to range from  $0.3  to 2.3  million per
year.   EPA does not  expect that actual enforcement costs will

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                              4-28
differ   significantly   from   these   levels.     Since   these
enforcement costs  are small relative  to  the other  elements  of
the RVP  control  (such  as  refinery  costs,  etc.),  the cost  of
enforcement  was   not  included   in   the   cost   effectiveness
calculations of Chapter 5.

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                              4-29
V.    Effect of Volatility Regulations on Imports

      One issue  which has received  extensive comments  is  the
effect volatility  controls  will have on  imports  of  crude oil.
Since  RVP  regulations  will  result  in  the  displacement  of
domestically produced discretionary  butane  from  the  gasoline
pool,  purchases  of  crude  oil  will  necessarily  increase  in
order  to  meet  a  fixed  gasoline  energy  demand.    This  is
especially  true  in the short  term,  before  investments  can be
made  to  install  equipment  neccessary  to  convert  butane  to
MTBE, ETBE,  alkylate, etc.  As  additional processing equipment
is  installed,  and as a price decrease establishes butane as a
competitive petrochemical  feedstock,  purchases  of  additional
crude  will  decrease,  by approximately 50 percent  as indicated
by Bonner and Moore modeling in Region 3.

       In  order  to assess this  issue, the maximum quantity of
n-butane  rejected  from the gasoline  pool in order  to achieve
the given RVP  reduction was estimated  for each of  Bonner and
Moore's  control  scenarios, using  a  blending value of  65 psi
for  n-butane.   The  energy content  of  this rejected butane,
less  the energy content  of  recovered  evaporative  emissions,
was then  compared  against  incremental crude  purchases made in
each  control  scenario.   Results of  this analysis showed that,
on  average, the energy  of the   incremental  crude  purchased
exceeded  that  lost by  the  displacement   of  butane by a  factor
of approximately 1.8.

       Given this information, an analysis of the effect of the
interim  volatility  standards  on  imports was  made.   For all
fuel  undergoing a  volatility  reduction, an  estimate  of  the
maximum quantity of  discretionary  n-butane which  would have to
be  rejected was  made.   A  total   of  12.4  million  barrels of
butane  per  year  was calculated  (assuming  a 5  month refining
period).  However,  under the  interim standards,  190,000 tons
per  year   of  evaporative  emissions  will  be   recovered,  the
energy equivalent of  1.9 million barrels of  butane.   Thus, the
energy  equivalent   of  10.5  million   barrels  of   butane,
(increased  by  a  factor  of   1.8),  will  be  required  in
incremental crude  oil.   This  totals approximately 12.3 million
barrels per year (81,000 barrels  per day) or $246 million per
year  at a $20 per barrel crude price.

       It  should  be   noted  that this represents  a  short-term
estimate  of incremental crude  purchases.   Bonner and Moore's
modeling  showed that,  in the  long term,  as  butane price falls
and  refiners  are able  (by modifying  processing)  to  use more
butane   (in   applications   such    as   petrochemical   feed,
alkylation,  and  isomerization)   the  import  effect  may  be
halved.   With  increased purchase  of MTBE and ETBE  facilities,
imports would  be reduced further   still.   Of course,  inclusion
of  running  losses  in  the  estimate of  evaporative  emissions
recovered would  have  a  large effect  on the amount of crude oil
purchased,  reducing  it to as low  as  48,000  barrels  per  day in
the short term,  and  less than half that  in the long  term.

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                              4-30


                     References (Chapter 4)


     1.     "The   Motor   Fuel   Consumption   Model   Thirteenth
Periodical  Report,"   Prepared  for  U.S.   DOE  by  Energy  and
Environmental Analysis,  Inc.,  DOE/OR/21400-H5,  January,  1988.

     2.     "MVMA  National   Gasoline   Survey—Summer   Season",
Sampling Date - July 15,1987.

     3.     "Petroleum Marketing Annual,  1985,  Volume 2,"  Energy
Information  Administration,  Office  of  Oil  and  Gas, U.S.  DOE,
DOE/EIA-0487(85)/2,  December,  1986.

0351Z

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                           Chapter 5

                       Cost Effectiveness

     EPA's methodology  for determining  the cost  effectiveness
of  various   alternative   combinations  of  vehicle-based   and
fuel-based excess  evaporative  emissions  control  programs  has
evolved over  a number  of years.   The  November  1985 study  of
these  issues   published  an  earlier  methodology,   which  after
public  comment and  internal  EPA  development  was revised  and
used in the proposal.[1,2]

     Sections   I.A and  I.B below describe  the methodology found
in  the volatility  NPRM,   Section  II  contains  the summary  and
analysis  of   the  comments  on   that  methodology,  and  finally,
Section  III  presents  the  cost-effectiveness  of  the  interim
proposal of volatility  control to 10.5  in ASTM Class C areas,
9.5 in B areas, and 9.0 in A areas.

I.   Synopsis  of NPRM Methodology

     A.    Basic Model

     The cost-effectiveness  (C/E)  model  developed  relationships
between the costs of  various alternatives and  the  VOC emission
reductions projected  to  result  from  those alternatives.  These
C/E  results   were  used  in  two ways  —  both  to  compare  RVP
control with  other  VOC programs and to  compare the various RVP
control alternatives  with one  another.   In the NPRM the model
was used  to  calculate C/E for  eight  control- cases ranging from
11. Si RVP  to   8.0 RVP  in  half-psi  increments  (i.e.,  summertime
control to the specified  RVP in Class C areas with proportional
reductions in other areas  coupled with  certification fuel  RVP
matched to the Class C RVP).

     A  key concept  utilized by EPA in  the volatility NPRM was
that of "incremental" C/E  analysis.   Because  a  wide range of
alternatives  are available which all address excess  evaporative
emissions  to   some  degree  (i.e.,   various  levels  of  combined
fuel-based  and vehicle-based   control),   it  is most  useful to
compare  the   C/E of each level of  control incremental  to the
immediately preceding  level  of  control  and   to  other   control
programs.  Thus the model  results  in  a range of incremental C/E
values/which  show the effect of each degree of  control.

     •rFor each level of control  analyzed,  the model calculated  a
cost and an emission  reduction for that  increment  and presented
their  ratio   in terms of  dollars  per  ton  of VOC  reduced.   The
following  paragraphs  discuss these emission  reduction and cost
calculations.

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                              5-2
     Most VOC control programs reduce emissions  and  incur  costs
throughout  the  year.    This  is  not  true  for  the  proposed
gasoline  volatility  control.   The   NPRM  assumed   that   VOC
reductions  in  the  summertime are  most  effective at  reducing
ozone  levels,  and are  hence the  most valuable reductions  to
achieve.   In  comparing  various   5-month  volatility  control
programs to  such year-round programs,  it  is necessary  to  make
an adjustment  for  when emission reductions  occur.   One way of
doing   this   would  be   to  modify   the   cost   effectiveness
calculation  of   other   year-round  programs   such   that   only
emission  reductions  which  occur  during  the ozone  season  are
fully credited.  However, the simpler  and more  practical method
chosen  by  EPA  was   to  modify  the  cost  effectiveness   of
volatility  control  to make it   look  like a year-round control
option.   To   do  this,   EPA  used  the  nationwide   emission
inventories  presented  in  Chapter  3  of  the  DRIA  which  were
projections of summertime emissions over  the period of  a  whole
year  (i.e.,  the  same as  multiplying  the  actual  5-month summer
emissions reductions by 12/5).

     EPA  then  made  a  second   adjustment  in  accounting  for
emission  reductions.   Because  the   primary   purpose  of  VOC
control   programs   is   to   achieve   reductions   in   ozone
non-attainment areas,  EPA  focused the  analysis of  volatility
control  on  reductions to  be achieved  in these areas.  To do
this,  the  nationwide inventory reduction  value at  each control
level  (from Chapter  3  of   the  DRIA)  was  multiplied  by  the
estimated   fraction  of   national   VMT   occurring   in  ozone
non-attainment   areas  (0.395).    A  credit  was   applied   for
attainment areas emission reductions,  which is discussed later.

     The  methodology which  EPA  used  for  computing  cost values
involved  a  summation of   several  terms  representing  various
costs  and  savings.   The factors the  model incorporated at each
level  of  control  were  the  following:    1)   total  national
refinery costs,  2)  an  economic  credit for control in attainment
areas,  3) a  credit for improved driveability,  4) a  credit for
improved  fuel  economy,  5)  a   credit  for  utilizing  captured
evaporative  emissions,  6)  an economic penalty for  increased
vehicle  weight,   plus  7)  the   change  in  vehicle  cost.   The
following   paragraphs   summarize   how   these  factors   were
determined.

     The   refinery-level    cost   came   from   multiplying   the
per-gallon  refinery cost   figures  from  the Bonner   and  Moore
modeling  (Chapter  5 of the DRIA)  by projected nationwide fuel
consumption.   Four economic  credits  were  then  calculated  and
applied  against  this  refinery cost.  An assessment in Chapter  5
of  the value  of improved  driveability as  fuel volatility  is
reduced  led to  a projected  economic  benefit   at each level  of
control  which  was  then   built  into  the  C/E  model.   Next,
improved  fuel  economy  at  each  control   level  due  to  fuel  of
greater  energy density (Chapter 5) was multiplied  by national
fuel               consumption              and              the

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                              5-3
pre-tax  price  of  gasoline.    Since  the  improved fuel  economy
values from Table 5-19 in Chapter 5 were  presented  for R-values
oil both  0.82 and  0.95,  both  sets  of values  were  incorporated
into  the C/E  model  to  delineate  the  likely range  for  this
economic credit.

     Another aspect  of  EPA's  evaluation  which led to  a credit
was the recovery and combustion of vapors currently  lost to the
atmosphere.   The methodology,  as detailed in  Chapter  5,  was to
convert  prevented   (or  recovered) VOC emissions  (assumed  for
simplicity  to  be  all  butane)  to  an  equivalent  amount  of
gasoline on  an  energy basis and  then multiply by  two factors:
1)  the  pre-tax retail  price of  gasoline  and  2)  combustion
efficiency factors (Chapter 5,  Section V.B.4).

     The final credit was  a  response to the  focus of  the model
on  non-attainment   area  emission   reductions,   as   described
above.   While  health-related  emission  reductions  occur  where
the ozone  standard  is  being  violated,  EPA  assumed  that there
would be some value to a program  such  as  RVP  control  that could
by  its   nature  also   reduce  ozone   in  areas   currently  in
attainment (e.g., by preventing crop  damage,  etc.).   Thus,  as a
way of  making  the  C/E  results more  comparable to  the many VOC
control  programs  which clearly  provide little benefit  outside
non-attainment  areas,  EPA  attributed a  credit  to RVP  control
for   attainment   area  emission   reductions.    The   value  of
attainment-area   VOC  reductions  had   not   been   rigorously
evaluated by EPA,  but a previously used estimate  of  $250 per
ton was applied  to  the  60.5 percent  of  nationwide emission
reductions assumed to occur in attainment areas.

      In  addition  to these credits,  EPA calculated and  added a
small  fuel   economy  penalty which would result  from increased
vehicle   weight    under   vehicle-based   control    scenarios
(Chapter 4).   Finally,   the  cost of  vehicle  improvements under
the various  scenarios,   as calculated in Chapter  4,  were added
to  the  other costs  and  credits.  The  sum  of all these factors
a.t each  level  of control  resulted  in C/E values  comparable to
other VOC control programs.

      B.    Types of C/E Analyses

      EPA  used  the  basic C/E  model  to calculate a  full set of
cost-effectiveness  values  for two  distinct   analyses,  a series
of single-year analyses  and a  33-year  average  analysis.

           1.    Single-Year Analyses

      The  single-year analyses had two purposes.   The first was
1:0  evaluate  steady-state C/E  as  represented  by the  C/E in the
year  2010.   By that time,  turnover of the vehicle fleet will be
essentially  complete;  nearly  all vehicles  can be assumed to be
equipped     with     improved     evaporative    systems.      This

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                              5-4


"steady-state" type  of analysis  thus allowed  a "snapshot"  of
the programs C/E once it has been fully implemented.

     The  second  purpose  of  the  single-year  analyses  was  to
examine  short-term  RVP  control  options.   Short-term  analysis
showed for a given long-term RVP  level whether  temporary deeper
RVP reductions  (without matching certification  fuel  volatility
reductions) prior to 2010 would also be cost effective.

           2.    33-Year Average Analysis

     The other type of  cost  effectiveness  analysis  is analogous
in most  ways to the single-year  analysis.  The  only difference
is that  here  C/E was  evaluated for  each of 33 years,  including
the earlier  years of  the  program when start-up  costs  would be
incurred.   Costs and  emission  reductions  were  calculated  for
each year  to reflect,  for example,  the gradual  turnover of the
vehicle  fleet.   The present  value  of both costs and  emission
reductions  was   then  calculated  using  a  discount  rate  of  ten
percent.

     C.    Comparative C/E Value

     The NPRM used  a  C/E  of $2000 per  ton as  a guideline for
comparing  RVP  control programs  to  other VOC  programs.   The
$2000/ton  benchmark  was   based  on  a  judgement  of  how  cost
effective  remaining programs  likely  to be required to reduce
ozone  will  be.   EPA  noted  that  a  number of  programs  being
considered  will   have  significantly  higher C/E values  (52 FR
31286).

     D.    Sensitivity of C/E Analyses to Various Factors

     EPA  performed  several  separate  steady-state   and 33-year
average   analyses  to   test  the   sensitivity   of  the  cost
effectiveness   results  to   certain   key  assumptions.    The
assumptions  tested  were  the  following:   l)   The   presence or
absence  of  onboard   refueling  control  requirements;   2)  the
future  cost of  crude  oil; 3)  the  use of  nationwide costs and
emission   reductions   versus   separate   costs   and   emission
reductions  for   the individual  ASTM  class areas;   and  4)  the
influence  of  the  number  of  non-attainment   areas   in  which
emission  reductions are  projected  to  occur.    In  addition EPA
also  performed  the   latter  two   analyses for  the  case  of
$33/barrel crude oil with  federal income taxes excluded.

     E.    Cost Effectiveness of Mid-Range Volatility

     Finally,  using  a separate  methodology,  EPA  analyzed the
cost  effectiveness  of  controlling  the mid-range volatility of
fuel,  as measured  by  the  percent  of fuel evaporated  at  160°F
(%160)-   Because EPA  received no  specific comments  about the
methodology  used for  determining the C/E  of  %ieo  control, the

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                              5-5
description of  that  methodology found in Chapter  6,  Section II
of the Draft RIA is not repeated here.

II.   Summary and Analysis of Comments

     This  section  will  focus  on  comments  directed  at  the
volatility NPRM's  cost effectiveness methodology.   A number of
issues  raised  by  commenters  affect   C/E   but   are  actually
directed  at  the  inputs  which  form  the  foundation  of the  C/E
methodology.   These  comments  are  summarized  and addressed  in
the  appropriate  section  elsewhere  in  this  document  (i.e.,
refinery costs  in  Chapter  4,  emission reductions  in  Chapter 3,
etc.).

     Similarly,  several  commenters   re-calculated C/E  results
using different  input values.  The  results  themselves are  not
appropriately  considered  comments  on  C/E   since they  depend
entirely on the  input values, which are  addressed elsewhere in
this document.

     A.    Basic Model

     While no  commenters  took issue with the incremental nature
of  EPA's  cost effectiveness  analysis,  there  were a  number of
comments  on  the  basic model EPA  used  to  compare  the  cost
effectiveness of volatility control to other control options.

           1.    Method of Adjusting for Full Year Comparison

     One  of  the more  significant  comments  involved objections
to  the  method EPA used to  adjust  the cost effectiveness values
of  the 5-month volatility program  to  emulate those of other VOC
control programs  which are year-round.   Texaco, API, and others
commented  that  adjusting  the emission  reductions   to  reflect
year-round  emission  reductions without  adjusting   the  costs,
distorts   the  C/E   analysis   and  places   a  high  value  on
nonexistent emission  reductions.

     While  EPA agrees that  this  adjustment  distorts the actual
omission   reductions   available  with  RVP   control,   the  C/E

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                              5-6
Therefore,  modifying this aspect of  EPA's  C/E methodology would
itself result in a distortion of comparisons  with  other  control
options, and no change will  be made.

           2.    Attainment  Area Credits

     A  topic  receiving a great number  of  comments  involved the
benefit of $250 per ton which EPA placed on  emission reductions
in  attainment  areas.  The  Conservation Law  Foundation  and the
National  Resources  Defence  Council  supported  EPA  taking  a
credit  for  emission  reductions in  attainment  areas.   Reasons
cited   include:   1)   benefits  associated  with  reducing  the
problems of  ozone and VOC  transport  to and  from non-attainment
areas;  2)  reducing  the possibility  of  future non-attainment of
current  attainment   areas  due  to  growth  in emissions;   3)  the
possibility  of  a  future lower ozone  standard  bringing  many
current  attainment  areas   into  non-attainment;   4)   possible
health  benefits  in  attainment  areas  due to  little or  no margin
of  safety  associated  with  the  current  ozone  standard;  5)
welfare  effects  such as materials,  crop,  and  forest  damage at
concentrations  below the current  ozone standard;  6)  reduction
in  the contribution  of ground-level  ozone  to the  greenhouse
effect;  7) reduction in air toxics  emissions resulting from the
reduction  in gasoline related  VOC  emissions.  On the basis of
these  attainment area  benefits of  VOC control,  NRDC  supported
an  attainment  area  benefit  much greater than  the  assumed value
of  $250 per ton.

     Contrary  to these  comments, Phillips,  MVMA, API,  GM, and
Chrysler all provided comments  stating that  the  $250  per ton
credit  taken by EPA was completely  unjustified.   The comments,
GM's  in  particular,  focused  around  the  lack  of  scientific
support  for  the  credit,  and  also  around EPA's lack of  legal
authority to claim benefits in  attainment  areas.

       Concerning EPA's  legal   authority  to   take  a credit for
emission reductions  in attainment  areas,  GM, MVMA, and Chrysler
appear  to  misunderstand either the  Clean Air  Act,  or  what we
proposed.   In  the  NPRM, EPA  clearly  stated that  the   primary
purpose  of  the  volatility  control  program  was  to   improve
compliance with the ambient  ozone  standard.  That  is  why  only
non-attainment  area  emissions  appear in the  denominator  of the
C/E  equation.    However,   when  EPA  implements  a  nationwide
emission  control program  such  as  volatility  control,   EPA is
required to  consider  the costs and benefits  of  the program in
non-attainment  areas  and attainment areas alike.   Therefore it
is  also  most'  appropriate  for  EPA  to  take  credit   for  any
benefits   which  occur   in  attainment   areas,   as  well  as
non-attainment  areas.   This is unrelated to  EPA's legal  mandate
to  protect human health.

     Aside from  the  legal authority,  the question still  remains
as  to what value should be placed on the  benefits in attainment

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                              5-7
areas.   The value  of  $250  per ton was taken  from  a sensitivity
analysis performed by  GM,  and was not  based on any scientific
data.  Few  if  any of  the  commenters stated  that  they believed
the value to be zero,  yet they presented no  information to show
that it  was anything  other  than zero.   GM  belittled the value
of VOC emission  reductions  in attainment areas, citing reasons
such  as  high  VOC/NOx  ratios,   high  naturally  occurring  VOC
emissions,  non-zero   background   ozone •  levels,    as   well   as
transport  of  stratospheric  ozone in  attainment  areas.   While
most of  GM's arguements  are valid  to one  degree  or  another,
they  do  not  result   in  a   conclusion  that  VOC   reductions  in
attainment  areas as  a whole have no  value,  rather  that  the
value is  smaller than  in NA areas as  is  assumed  by EPA.   EPA
has  been  working on placing a  value on  reductions of  VOCs  in
ctttainment  areas as  well  as non-attainment  areas.   While  the
work  is   not   yet  complete,   the   preliminary   results   are
significantly higher than the $250 per ton used in the proposal
f:or  this   regulation.   Benefits  of   control  which   EPA   is
considering include:

     1)     Reduced  ozone   and   ozone   precursor   transport   to
           non-attainment areas;
     2)     Health  benefits   at  ozone  concentrations  below  the
           standard;
     3)     Welfare  benefits  at  ozone  concentrations  below  the
           standard (materials,  crop, forest damage);
     4)     Reduced air toxics emissions (e.g., benzene);
     5)     Reduced  contribution  to  ambient  particulate matter
           and   the   problems    associated   with   particulate
            (Through  condensation and  formation   of   secondary
           aerosols, VOCs can form particulate matter);
     6)     Odors,  soiling,   and  morbidity  associated  directly
           with  volatilization  of organic  compounds emitted to
           the atmosphere.

Based on these benefits  a non-zero value  seems appropriate,  and
for  purposes  of  this rulemaking  the value of  $250  will  be
retained.

     Also   on   the  topic   of   attainment   area   credits,  API
questioned  the  manner  in   which  EPA  applied   the  value  of
$250/ton.   API  stated that  it  should  be  multiplied  by 5/12
since   the  emission   reductions  will   only  occur   in  the
summertime.   Actually,   the   $250/ton   figure   is   $250  per
year-round  ton  of  VOC reduction, or  on  the same basis as  the
$2000/ton guideline used for  NA  areas.  As  a result, the actual
summertime  attainment  area emission  reductions   need  to  be
adjusted  by 12/5  in  order  to put  them on a  year-round basis;
just like the non-attainment  area reductions.

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                              5-8
           3.     General Methodology

     Texaco  stated  that  due  to  fuel  weathering,  the  cost
effectiveness must  be  shifted  to  allow  for  a  1.5 psi  margin
between  marketed  fuel  and  the  fuel  actually  used  by  the
engine.  The  effects  of  weathering,  however,  were taken  into
account when  the evaporative emission factors were calculated
in the DRIA and  again in Chapter 2  of  this  Final  RIA,  and need
not be corrected for again as Texaco suggests.

           4.     Transport Regions

     NRDC  stated  that an alternative  means  of taking  a  credit
for  some  of  the benefits which  acrue  in  attainment areas might
be  simply to  include the  transport  regions  and  borderline
non-attainment areas  into the  fraction of the country currently
in  non-attainment,   and  credit   emission  reductions  in  those
areas  as in non-attainment  areas.  EPA recognizes the rationale
behind such  a  strategy,  and as stated  in  Chapter  3,   EPA  is
studying the  transport phenomenon.   By examining  the  ratio  of
$2000  to  $250 per  ton,  it  is  clear  that  this  approach would
only  reguire  one eighth of the  tonnage to be  eguivalent  to the
$250/ton credit.  This would only be 7.5 percent  of nationwide
VMT,  or   less  than  20  percent  of  non-attainment area  VMT.
However,  until the  transport work is completed we  believe that
the  method chosen  by  EPA  is  the  more  justified of the two
alternatives,   and   will   not    change   approaches  for  this
rulemaking.

     B.    Types of C/E Analyses

     All comments provided  apply more specifically  to the basic
model or to one of the other areas,  and as a result will  not be
repeated here.

     C.    Comparative C/E value

     A number of comments  were  recieved not  only  on the value
to  be placed on  emission reductions  in  attainment  areas,  but
also  on  the  $2000  per ton  used as a  guideline  for acceptable
cpst  effectiveness  of VOC  control.   NRDC stated that  there is
rfo  legal  or   scientific  support  for setting  a maximum cost per
ton  of control  at  $2000.   Chrysler  stated  that  EPA had not
shown  that a cost  of $2000 per  ton was  cost effective.   Sohio
supported  Chrysler's  statement,   and went  on  to  state  that the
$1100  per ton  used  by  EPA in  the  lead  phasedown regulation
should be selected  as an  upper bound.   NESCAUM  on  the other
hand  pointed out that many other  control  measures implemented
and  being  considered  in  the Northeast  have  costs  much  higher
than  $2000/ton associated with them.

      In so far  as EPA has not performed a cost benefit analysis
which  attempts  to place  a  cost  savings  to  society for  all  of

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                              5-9
the  benefits  which  result  from  VOC  control  and  ozone  level
reductions, Chrysler  and  Sohio are correct.  EPA  is  developing
such an analysis, but  it  will not  be  completed for  some  time.
Instead,  EPA  (as  NESCAUM   suggested)   focused  on  the  cost
effectiveness  of   other  control   options  which   might   be
implemented to  reduce VOC to bring  non-attainment   areas  into
compliance.

     EPA's   Office   of   Policy   Planning    and   Evaluation
commissioned  a  study which  estimated the  cost of  current  and
potential  VOC control options.[3]   The  cost  effectiveness  of
these  options ranged  from -$3260  to  $80853  per  ton.    If  all
currently available control options were  applied,  many  areas of
the  country  were   found  to  still   require   additional  VOC
reductions.   The  average  cost of  emission  control programs  to
achieve  addition  emission reductions  was then  estimated  to be
within the $2000 to $10000 per ton  range.   The  value  assumed by
EPA  in the NPRM  of  $2000/ton  represents  the  low end  of this
range,   and  as  a  result  appears  reasonable  for  use  as  a
guideline  to  demonstrate  the cost effectiveness  of  volatility
control.   However,  as NRDC  stated,  this  level  is  not  to  be
considered as an  absolute ceiling for the  C/E  of  a  VOC control
program.

     D.    Sensitivity of C/E to Various Factors

     . A  few of the  commenters estimated  the  C/E  of  volatility
control  on their own using  different values  for  many  of  the
input   variables,   adding  to  the  sensitivity  runs   already
performed  by  EPA.   Selection of the appropriate input variable,
however,  is typically not part of the cost effectiveness model
itself,  but   is  addressed elsewhere  in  the  RIA.   As  a  result
these  comments will be addressed in those  places.   In addition
to these  comments,  NRDC  commented that due to  the uncertainties
surrounding  the  adequacy of  the  current  ozone  standard,  EPA
should  perform  sensitivity  runs  assuming ozone standards of
0.08 and  0.10 ppm.   Such sensitivity  runs, although  useful for
observing  the  effects  of  reductions in  the  ozone standard,
would   not  add  significantly  to  this   rulemaking  since  we
conclude  that the program is cost effective  even at  the current
cuzone  standard.

     OMB   provided   comments    suggesting   that   the    cost
effectiveness  of volatility control  in Class A  and  B areas
should  be examined independently  of   Class C  areas,  since the
C/E  of volatility  control for Class  A  and  B  fuels  is greater
than Class C fuels.   In Section C  below,  the class-specific
cost  effectiveness   runs are  performed   in  addition  to  the
nationwide cost effectiveness.

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                              5-10
     E.     Alternative Programs

     Comments  were  provided  by  GM  and  a  number  of  other
organizations supporting various modifications  or  substitutions
for  the  regulations  proposed by  EPA.   All  of these  comments
lacked sufficient analysis to justify any deviation  by  EPA from
its  proposals.   In  some  cases partial  analyses or  results  of
analyses were  presented.  However,  even with  this  information
there was  no reason to believe  that the alternatives  proposed
by the commenters  would result in an equal or greater  level  of
VOC control at an equal or lower cost.

Ill.  Final Analysis

     For  the  1989  through   1991  timeframe,  EPA  will  require
gasoline sold  during the summer  months  to have  its volatility
reduced below the  maximum ASTM limits  to 10.5 psi (primarily in
Class  C areas),  9.5  (primarily  in  Class  B  areas),  and  9.0
(primarily  in  Class  A   areas,  no  reduction).   (The  specific
standards for each area  are  outlined  in Chapter 1.)   The cost
effectiveness  analysis  for  this  level  of  control  is  very
similar to that performed in  the  proposal.   However, since this
is   only   a  short  term  control  program,  a  33-year  cost
effectiveness analysis is not applicable,  and no vehicle costs
are  involved.  The cost effectiveness  analysis is performed for
1990  and' assumed to be representative  of the  entire 1989-1991
control period.

     A.    Class-Specific Emission Reduction Estimates

     Class-specific  emission  reduction  estimates were derived
in Chapter  3  and presented  in Table 3-2, and  will  not  be shown
again  here.   Running  loss  and  excess  evaporative  emission
reduction estimates were also derived, and  are included here as
a sensitivity analysis.

     B.    Class-Specific Control Cost Estimates

     The  refining cost per  barrel  of  gasoline  of  controlling
the volatility of the fuel for the control  case described above
was  taken  from  Chapter  4.    The  refining  cost  for each ASTM
glass area  was  then determined by multiplying  these per barrel
costs by the total nationwide gasoline consumption  as estimated
by DOE for  1990,  and the  fraction of  gasoline  sold   in each
area.[4]   From these  costs  were  then  subtracted  credits for:
increased  fuel  economy using the  same  methodology as  in  the
DRIA  but  with  an  R  factor  of  0.85,  fuel  energy  density
estimates  from  Chapter 4,  and fuel consumption  estimates from
DOE;   fuel   recovery   through   a  reduction   in   evaporative
emissions,  also  following the methodology in the DRIA,  but now
using  a fuel  recovery factor  of  1.0,  and  new  summertime July
average  emission  reduction  estimates   (less  exhaust  emission
reductions);  and an attainment  area  credit of  $250 per ton of

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                              5-11
emission  reductions  occuring  in  attainment  areas  (44.6%  in
Class C areas, 75%  in  Class  B areas, and 76%  in  Class  A areas)
using the  year-round July average  emission  reductions  found in
Table 3-2.   Unlike  the NPRM,  no  credit was  taken for  vehicle
driveability  improvement  with   lower   volatility  fuels.    In
addition, since no  vehicle control  will be required, there are
no  vehicle costs or weight  penalty costs  which must  be added
into the  analysis.   The  resulting  net  costs  of  this  gasoline
volatility   control   scenario  (adjusted  for   summertime   and
nationwide control)  are shown in Table 5-1.  As can be  seen, if
running  loss  and  excess  evaporative  emission   reductions  are
included,  the  credits  are larger  than the refining  costs,  and
the adjusted costs  become negative.  Since the average gasoline
currently  in-use  in Class A areas  is  less than the  level of
control currently being  promulgated, there are no control costs
in Class A areas.

     3.    Cost Effectiveness

     The  cost  effectiveness  of  the control  program was   then
determined by dividing the net adjusted costs from Table 5-1 by
the year  round design value day emission  reductions occurring
in  NA  areas  as  shown   in  Table  3-2.   The   resulting   cost
effectiveness of  this  volatility  control program  are well   with
the $2000/ton guideline  ($236/ton nationwide,  $165/ton  in Class
C  areas,  $576/ton  in Class B .areas.,   and  $0/ton  in  Class  A
areas).    If the running loss and  excess  evaporative  emission
reductions  are  included,  then  the  resulting  C/E are  all   less
than  zero (-$201/ton  nationwide,   -$155/ton  in   Class  C areas,
-$425/ton in Class B areas,  and $0/ton  in  Class  A areas.  Thus,
this  volatility  control  option  can be  considered   to  be   very
cost effective.

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                                    5-12
                                 Table 5-1
          Cost Estimates for the  Interim RVP Program ($million/yr)
Summer
Refining
Cost
Fuel
Economy
Credit
Fuel
Recovery
Credit
Net
Cost
                                                       Attainment
                                                       Area
                                                       Credit
DRIA Emission Reductions Only
Class A
Class B
Class C
Nationwide
  0.0
 88.56
158.03
247.09
0.0
11.70
38.95
50.69
0.0
17.11
36.42
53.53
0.0
59.75
82.67
142.88
0.0
29.64
40.17
69.81
                                                      Adjusted
                                                      Net
                                                      Cost
                                            0.0
                                           30.11
                                           42.49
                                           73.06
Including Running Loss and Excess Evaporative Emission (for Sensitivity)
Class A
Class B
Class C
Nationwide
  0.0
 88.56
158.03
247.09
 0.0
11.66
38.81
50.52
  0.0
 54.72
118.78
173.51
0.0
22.17
0.44
23.06
0.0
88.39
116.81
205.20
0.0
-66.22
-116.37
-182.14

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                              5-13
                     References (Chapter 5)

     1.     "Study   of   Gasoline   Volatility   and   Hydrocarbon
Emissions  from   Motor  Vehicles,"   U.S.    EPA,   OAR/OMS/ECTD,
EPA-AA-SDSB-85-05, November 1985.

     2.     "Draft   Regulatory   Impact   Analysis,   Contol   of
Gasoline Volatility  and Evaporative Hydrocarbon  Emissions  from
New Motor Vehicles," U.S.  EPA, OAR/OMS/ECTD, July 1987.

     3.     "National Assessment  of VOC,  CO, and NOx  Controls,
Emissions, and Costs," Prepared for  Office of Policy  Planning
and Evaluation,  U.S.  EPA, by  E.H.  Pechan-and Associates,  Inc.,
September 1988.

     4.     "The   Motor   Fuel  Consumption  Model   Thirteenth
Periodical  Report,"  Prepared  for  U.S.  DOE   by  Energy  and
Environmental Analysis, Inc., DOE/OR/21400-H5, January, 1988.

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